2023 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 2023 and beyond)
- Ways to optimize your solar investment
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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
Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. Financial incentives like these are intended to encourage more Americans to switch their home over to renewable energy. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are provided by the state of Kentucky or by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: Don't forget to talk to your Somerset utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
- Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when paying property tax on your house.
- Rebates: Solar rebates might be offered by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of the cost of your solar system.
The ITC applies to the total cost of solar panel installation, including the panels themselves as well as labor, accessories and equipment. 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. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
To more fully understand how the ITC might apply to your situation, call your local Somerset solar panel installer and ask for more information.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as the Clean Energy Credit. The new Clean Energy Credit extends until 2035. You can now apply for a 30% credit for solar systems installed between 2022 and 2032. The total credit will then see a slight annual decrease until it expires. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to learn more about how the new Clean Energy Credit applies to you is to reach out to your local Somerset solar panel company with your questions.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Similar to federal incentives, these might include rebates, tax credits and more. Certain incentives are ongoing, while others are offered for only a limited time. Local solar incentives could come from the Kentucky government, or from your specific county or municipality.
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 past 15 years. You can get solar incentives from the Kentucky government, the federal government or your local utility company. Speaking with your local Somerset solar panel installation expert is the right first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Somerset, KY Solar Incentives FAQs
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