2025 Solar Incentives Guide for Somerset, KY - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Somerset.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Somerset solar installers to see how much you can save.
Please enter a valid 5-digit zip code!
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Somerset?
Jackson Energy Cooperative - Residential Energy Efficiency Rebate Programs
CARES Program: Up to $2,000/household
South Kentucky RECC - Residential Energy Efficiency Rebate Program
Touchstone Energy Home: Varies, contact energy advisor for details
Resistant Heat to Heat Pump: $250-$750
Energy Audits: FREE
SimpleSaver: up to $20 in bill credits annually for each air conditioner enrolled
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" refers to financial incentives implemented by the government and by solar companies to encourage the use of renewable energy by making the installation and use of solar panels more affordable. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are provided by the state of Kentucky or your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Somerset utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions let you ignore the added value of your solar system when you calculate how much property tax you need to pay.
- Rebates: Rebates, or cash back after a purchase, are normally applied prior to any solar tax credits being calculated. Rebates can be offered by your local utility company, by your county or by your state.
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC offers a tax credit for a specific percentage of the cost of your solar system.
The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as equipment, labor and accessories. 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 claim amount.
Contacting your local Somerset solar panel installation expert is the best way to understand how the ITC may apply to your situation.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. The amount will be decreased slightly each year until the end of the current program. Starting in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit will apply to you is to talk with your local Somerset solar panel company.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Certain incentives are ongoing, while others are offered for only a limited time. These local incentives might come from your county or municipality, or from the Kentucky government.
Next Steps for Installing Solar in Somerset
The expanding number of solar incentives available has contributed greatly to the increase in the adoption of solar energy nationwide over the last 15 years. You might qualify for solar incentives from your local utility company, the Kentucky government or the federal government. Speak with your local solar panel installer today to discover more about the various programs and to save as much money as possible on a solar system for your Somerset home.
EcoWatch's Somerset, KY Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Reaching out to the company that installed your solar system, or any local Somerset solar installer, can help you understand what incentives you might want to apply for.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now called the Clean Energy Credit, is slated to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order that incentives will be applied in may vary depending on which incentives you are claiming but in most cases yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to verify you are claiming all possible incentives and applying them in the correct order.
Can I use a combination of solar and another type of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also use both renewable energy sources and a non-renewable backup source of energy. Make sure that you discuss the details of your plan with your local Somerset solar panel installer, so that you understand what you'll need and what incentives you may or may not qualify for.
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.