2023 Solar Incentives Guide for Paducah, KY - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Paducah.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Paducah?
Federal Residential Renewable Energy Tax Credit
The term "solar incentives" refers broadly to financial incentives put in place by solar companies and the government to encourage the adoption and use renewable energy by making solar panels more affordable. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are handled by the Kentucky government or by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Net Metering: Be sure to speak to your Paducah utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions let you exclude the value added by your solar system when calculating how much property tax you need to pay on your house.
- Rebates: Rebates, or partial refunds after a purchase, are usually given prior to any solar tax credits being calculated. These rebates might be offered by your local utility company, by your county or by your state.
Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of the cost of your solar system.
The ITC can be applied to the total cost of solar panel installation, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.
Reaching out to your local Paducah solar panel installation expert is the best way to understand how the ITC could apply to you.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; this amount will then decrease slightly each year until the end of the current program. The program expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit might apply to you is to reach out to your local Paducah solar panel company with your questions.
State & Local Solar Incentives
Tax credits, rebates and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. These incentives may be provided by your county or municipality, or by the Kentucky government. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Paducah
Nationwide solar energy use has significantly increased in the past 15 years, in part thanks to the increase in availability of solar incentives. You can obtain these incentives from your local utility company, the federal government or the Kentucky government. It is a good idea to talk to your local Paducah solar installation expert to learn more about these incentives and to make sure that you're getting all of the money you can for your solar system.
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries (coming 2022)
- Price-match guarantee
- Sleek, efficient, and durable solar panels
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- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Paducah, KY Solar Incentives FAQs
What if I want to add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
Many solar incentives are intended to apply to a property located within the United States that you own; most secondary residences will fall into this category. There may be other solar incentives available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.
How much can I save on my electric bill annually if I install solar panels on my Paducah home?
Generally, Paducah homeowners who install solar panels save about $997.64 per year, or about $18,955.08 over 20 years after making the switch.
What are the best solar panel installation companies near me?
To find the right solar panel installer for you, check out our guide to the top solar companies in Paducah.
I want to change out my appliances for ones that are more energy-efficient. Are there any incentives I can claim?
Under the new Inflation Reduction Act, there are a variety of new financial incentives that are available when you make eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on precisely which incentives you are eligible for, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to ensure that you are claiming incentives correctly and that you're getting the most money possible.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.