Solar incentives fall into four categories: Solar tax credits, rebates, payments on performance, and tax exemptions. The most widely used incentive for home solar is the federal solar tax credit, which in the year after installation provides 26 percent of the total cost of installing solar back to a homeowner.
Solar rebates are dependent on supplier services. Currently, only Florida Power and Light offers a solar rebate and provides net metering for all utilities regulated by the state utility commission. Under the legislation, they have to pay consumers in a month to create a net surplus. If they generate more power over 12 months than they use, then they must be paid by the utility.
Solar Efficiency Payments are extra money charged to solar owners for producing solar power. Typically, output incentives are related to Solar Renewable Energy Credits, or SRECs, which are a kind of “growth verification.” SRECs have meaning because, by buying them, a utility company may show that it obtains energy in compliance with a solar carve-out or Renewables Portfolio Contract.
Furthermore, individual states offer tax exemptions for solar owners, effectively reducing the cost of going green by exempting them from sales or property taxes generally paid by the owners by making an expensive purchase that increases the value of their properties.