Residential Solar Incentives by State, 2026

Federal tax credit, state-level rebates, and net metering rules that change the math on residential solar — broken down state by state.

Residential solar economics depend on three layered incentives: the federal tax credit, state-level programs, and utility-set net metering rules. Federal is uniform; state and utility programs vary wildly. Below is a snapshot of where the big residential-solar states stand in 2026.

This is a primer, not legal or tax advice. Specifics change as state legislatures meet and utility regulators update tariff schedules — always confirm with the actual installer and a CPA before signing.

The federal baseline (applies everywhere)

The Residential Clean Energy Credit (formerly the ITC) is 30% of total system cost, available through 2032, then stepping down to 26% in 2033 and 22% in 2034.

What's eligible:

Solar PV panels, inverters, wiring, racking, labor, permitting
Battery storage 3+ kWh (even standalone, no solar required, since 2023)
EV charging equipment in qualifying low-income or rural census tracts (separate 30C credit, capped at $1,000 residential)

This credit is nonrefundable but can be carried forward indefinitely. You claim it on Form 5695 when you file your taxes the spring after installation.

The big residential solar states

California

Federal ITC: 30%
State rebate: SGIP for batteries (income-dependent; $0.15–$1.00/Wh; better for low-income households)
Net metering: NEM 3.0 — export rates 60–80% lower than retail. Batteries dramatically improve payback.
What changed in 2026: Continued attrition of NEM 2.0 grandfathering as systems hit anniversary dates. Solar+battery is now the de facto residential default; solar-only has lost much of its appeal.

Texas

Federal ITC: 30%
State rebate: None statewide. Some utility programs offer one-time rebates ($1,500–$3,000) in limited geographies.
Net metering: No statewide policy. Investor-owned utilities (Oncor, CenterPoint, AEP) handle interconnection independently. Some retail electric providers (Green Mountain, Octopus) offer 1:1 buyback plans for solar customers.
Best path: Compare retail electric provider buyback plans before signing solar. The same kWh exported can be worth radically different amounts depending on your REP.

Florida

Federal ITC: 30%
State rebate: Sales tax exemption on solar equipment (no 6% sales tax on the install). Property tax exemption — solar doesn't increase your assessed value.
Net metering: 1:1 retail-rate net metering for systems ≤2 MW. One of the most favorable in the country.
Licensing: All installers must hold a Florida DBPR CVC (Certified Solar Contractor) license to install residential solar. Aora Solar's directory filters by this credential.

New York

Federal ITC: 30%
State rebate: 25% state tax credit capped at $5,000 (separate from federal — both stack)
NYSERDA NY-Sun program: Direct cash incentive based on capacity and region; pricier downstate, smaller upstate; tapers as program targets fill
Net metering: 1:1 retail with Value of Distributed Energy Resources (VDER) "Value Stack" alternative for some customers
Best path: NY-Sun-approved contractors get program incentives passed through; ask your installer if they're on the NYSERDA Quality Solar Installer list.

New Jersey

Federal ITC: 30%
State rebate: Sales tax exemption on solar equipment. SuSI (Successor Solar Incentive) — performance-based SREC-II payments, currently ~$85/MWh produced for 15 years
Net metering: 1:1 retail rate
Property tax exemption: Solar improvements don't increase assessed property value

Massachusetts

Federal ITC: 30%
State rebate: $1,000 state income tax credit + SMART program performance payments (rate varies by utility and project block)
Net metering: 1:1 retail for systems ≤25 kW residential
Connected Solutions: Pays for battery storage that participates in grid demand response

Arizona

Federal ITC: 30%
State rebate: $1,000 state income tax credit for solar; sales tax exemption on equipment
Net metering: Replaced with "Net Billing" — exports paid at avoided-cost (well below retail). Battery storage strongly recommended.
Salt River Project and APS have separate rate structures; check your utility's specific solar tariff.

Colorado

Federal ITC: 30%
State rebate: None statewide; some utilities offer modest incentives
Net metering: 1:1 retail for residential, capped by utility
Property tax exemption: Solar doesn't increase assessed value

North Carolina

Federal ITC: 30%
State rebate: None statewide; Duke Energy NC Solar Rebate ended in 2022
Net metering: "Bridge Rate" transitioning to time-of-use; net metering 1:1 retail expiring for new systems

Illinois

Federal ITC: 30%
State rebate: Illinois Shines program — pays for SRECs over 15 years; rates set per delivery year
Net metering: 1:1 retail, transitioning to net billing in 2026 for new systems

Quick checks before assuming an incentive applies

State income tax credits require state income tax liability. Retirees with minimal state income often can't fully use them.
Utility-specific incentives are sometimes oversubscribed — confirm your installer has them locked in for your project before signing.
SREC markets fluctuate. A solar quote that pencils based on 2024 SREC prices may not pencil at 2026 prices.
Net metering grandfathering windows close. If your state is transitioning (CA, NC, IL), get permits in before the grandfather date.
Property tax exemption isn't universal. Texas has it. North Carolina has it. Some states only exempt the solar value, others exempt the full home value increase from solar.

What to do with this

When comparing installer quotes, make sure they're showing you the same incentives. Some quote "after federal + state + utility" net costs that may not actually apply to you. Others quote gross and let you do the math.

For the most current incentive details, the DSIRE database (Database of State Incentives for Renewables and Efficiency, run by NC State) is the gold-standard reference. Confirm anything your installer claims against DSIRE before signing.