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
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
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
The term "solar incentives" generally refers to financial incentives that are in place to encourage the use of renewable energy by making the installation and use of solar panels more affordable. These incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of Kentucky and some by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the federal government. These differ from tax deductions.
- Tax Exemptions: These may come in the form of property tax exemptions, which can let you exclude the value added by your solar panels when paying taxes on your home. They may also include exemptions on sales tax at the time of purchase.
- Net Metering: Net metering factors in after your solar system is up and running. If you've signed a net metering agreement with your Somerset utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other areas you might make back a percentage of the value.
- Rebates: Rebates, or cash back after a purchase, are usually applied before any solar tax credits are calculated. These rebates might be provided by your local utility company, by your state or by your county.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. A federal incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of your solar system's cost.
The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. Originally, the ITC covered 30% of all system installation costs (panels, labor, equipment and accessories), although the amount has fluctuated over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Your local Somerset solar panel installation expert can provide you with more information about the ITC and how it may apply to your situation.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit. This amount will decrease slightly each year until the current program ends. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. Your local Somerset solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Like with federal incentives, these may include rebates, tax credits and more. Incentives might be offered by your county or municipality, or by the state of Kentucky. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Somerset
You can qualify for solar incentives from the federal government and the Kentucky government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Talking to your local Somerset solar panel installation expert is a great first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
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
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Somerset, KY Solar Incentives FAQs
What if I am planning to add a solar system to a vacation home, rental property or commercial property? Will I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to better understand what solar incentives apply to you, many incentives apply to a second home, so long as that home is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the specifics.
How much will a solar system save me on my electric bill in Somerset annually?
Once you add solar panels to your Somerset home, you can anticipate savings of about $833.09 per year, or about $15,828.73 over 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly called the ITC and now named the Clean Energy Credit, is set 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 receive incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on which incentives you are receiving, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to verify that you are claiming the correct incentives and getting the most money you can.
Can I use a combination of solar and another type of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also combine renewable energy generation with a backup source of non-renewable energy. You should discuss your plan with your local Somerset solar panel installer, to make sure you know what you'll need and what kinds of incentives you will or won't 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.
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.