Understanding Solar Battery Tax Credit: Incentives & Rebates for Homeowners

Over the past decade, solar panels have become an excellent source of clean energy and energy independence for many homeowners. Every year more and more homeowners are considering investing in solar panel systems for their property. However, one of the main concerns to adopting solar energy is option its upfront cost.

Solar panels are a significant investment but thankfully there are various tax credits, incentives and rebates available that can reduce the upfront cost of solar panel systems and make it more affordable for the homeowners!

While solar panel installation incentives and tax credits are a popular topic, there is not enough information on incentives and tax credits available for solar batteries. In this article, we will discuss solar battery tax credits and incentives, and how you can take advantage of these solar financing reliefs!

Utility companies and government bodies in the US are beginning to recognize the importance of energy storage systems, such as solar batteries, for a sustainable future. Few years ago, solar battery systems were not eligible for any tax credits or incentives, and if they were, the terms to qualify for them where complicated. However, now there are plenty of financial benefits available to homeowners with solar panels and a battery system in their homes.

Let's discuss each of these financial benefits in further detail!

If you are researching about tax credits and incentives for solar, you may have come across the Federal Investment Tax Credit (ITC). The federal government offers the most significant incentive for residential solar battery installation through the Federal Investment Tax Credit (ITC). This federal solar tax credit can provide homeowners with storage systems over 3 kilowatt-hours (kWh) a reduction of $3,000 to $5,000.

However, for commercial property owners, the tax credit is set at 30% of the installation cost for solar battery storage systems, given that the storage system is larger than 5 kWh in size and meets certain prevailing wage and apprenticeship requirements.

Apart from the federal tax credit, many states offer their own tax incentives for solar battery installation. The amount of incentive varies depending on the state and is subject to change. To find out about any state-level tax incentives on solar batteries, keep reading!

Keep in mind that these incentives are subject to change and you should always double-check with your state government's energy department for the latest information and eligibility requirements!

California offers a solar tax credit for homeowners who install battery storage systems with their solar panel installations. The state's Self-Generation Incentive Program (SGIP) offers rebates to eligible residential and commercial owners for the installation of energy storage systems, including solar batteries.

Under the SGIP program, California provides a dollar per kilowatt ($/kW) rebate for the energy storage installed and typically covers about 20% of an average solar battery system's cost.

Massachusetts being a solar-friendly state provides a tax credit with a cap of $1000. Along with this, the state also offers incentives for homeowners who install solar battery storage systems through the Solar Massachusetts Renewable Target (SMART) program . This program offers financial incentives for solar installations for each kilowatt-hour of energy produced.

The terms of calculations for this program might be complicated, so if you live in Massachusetts check out the Massachusetts SMART program to learn about it in detail!

Maryland offers one of the best solar battery tax incentives in the country! The state offers a tax credit for 30% of the installation cost for battery backup systems, up to $5,000 for residential properties and up to $150,000 for commercial properties!

This makes installing solar batteries in Maryland a smart investment for homeowners and business owners alike.

Note: The full $750,000 of funding for this program was used as of September 2022 so make sure to check out the Maryland solar incentives guide for more details.

The Hawaii Electric Company (HECO) offers Battery Bonus Program where the customers are paid one-time cash incentive of $850 per kW energy if they commit to serve the grid for 2 hours every day. In addition to this, the customers receive monthly incentive of $5 per kW of stored energy as credits.

The program is most beneficial to Hawaiian homeowners with solar panels and battery storage systems who are ready to commit their battery daily for 10 years!

The state of Minnesota provides incentives for homeowners who wish to install energy storage systems with solar panels. The state offers rebates to reduce the upfront cost of battery storage system.

Minnesota's battery incentive rates are as follows:

This incentive is a great way for Minnesota residents to bring down the high upfront cost of installing batteries. To know more about Minnesota's energy storage incentives, check out their website !

The state of Oregon has been leading the way in clean energy initiatives, and now they offer a great solar battery tax credit to incentivize homeowners to switch to clean energy. The Oregon Solar + Storage Rebate Program provides eligible residential customers with up to $5,000 for installing solar energy system and up to $2,500 for energy storage system.

The energy storage rebates' amount varies depending on system size and is calculated based on the kilowatt-hour (kWh) capacity of your storage system. To learn more about this program, visit the OSSRP program website !

Apart from federal and state-level incentives, some utility companies also offer their incentives for solar battery storage systems. Here are a few examples:

Eversource and National Grid have teamed up to offer the ConnectedSolutions program for their customers in Massachusetts, Connecticut, New Hampshire, and Rhode Island. Under this program, homeowners with solar battery storage systems can get paid an annual incentive in return for access to stored energy in your battery.

This incentive is great as it can cover the cost of installing a battery system in 5 years!

If you live in Jacksonville, Florida, and are a customer of the JEA utility company, you're eligible for their solar battery rebate program. Under this program, customers with rooftop solar installation systems can receive a rebate of $2000 when they install a battery system.

As you can see, there are various incentives available for homeowners looking to install solar battery systems across the US. If you don't live in these locations, do not worry! You will be able to find incentives and programs in your state or local government that will help you switch to a solar system with a battery.

Make sure to do your research and take advantage of these incentive opportunities while they last!

Note: The availability and terms of these incentives may vary depending on your location, so always check with your state government's energy department for the latest information and eligibility requirements!