Solar Panel Grants

✔ The Residential Renewable Energy Tax Credit can save you 30% on solar panels

✔ You can also fold your solar purchase into your mortgage

✔ Many states have sales and property tax exemptions for solar panel owners

Solar panels can save you hundreds of dollars per year on your energy bills – plus they’re good for the climate and require very little maintenance.

The only major drawback is their initial cost, which is currently $11,080 for the average household.

Thankfully, there’s a whole host of government grants available to homeowners looking to go solar – and we’ve identified all the best ones below.

Are there any government grants for solar panels?

There are currently two main government grants when it comes to buying solar panels for your home: the Residential Renewable Energy Tax Credit and the Energy Efficient Mortgage Program.

Here’s everything you need to know about these initiatives.

Residential Renewable Energy Tax Credit

Sometimes referred to as the Clean Energy Credit or Investment Tax Credit, this scheme can reduce the cost of your solar panel system by 30%.

The money will be taken off your income tax for the year – so if you buy a system for $20,000, you’ll have $6,000 taken off your taxes.

The credit can apply to any residential solar panel system – and you can even add a solar battery, as long as it has a capacity of three kilowatt hours (kWh) or more.

It doesn’t even have to be for your primary residence.

Here are the other main requirements:

• The solar panel system must have been installed at a US residence you own between January 1 2017 and December 31 2034
• You must own the solar panels, either outright or through financing

The solar panel installation must be new

Energy Efficient Mortgage Program

This Federal Housing Administration (FHA) scheme allows homebuyers to borrow a larger amount as their mortgage so they can pay for a new solar panel system.

To access this program, you have to be planning to buy your solar panels at the same time you’re purchasing or refinancing your house.

A qualified home energy expert will carry out an assessment, and you’ll only be able to get solar panels (or other energy-efficiency measures) if they decide you’ll break even by the end of the panels’ lifespan – which is how it should be.

You won’t have to qualify for the extra loan, just the amount you’re loaning to buy your house.

The FHA will even insure the loan to protect you against loss if you default on your payments.

There are also lots of solar panel grants that your local community may be able to apply for, as well as plenty of state grants that we’ll get to below.

Are these grants any good?

These grants are incredibly helpful when it comes to affording a solar panel system.

The Residential Renewable Energy Tax Credit is a fantastic initiative.

The largest barrier to buying solar panels is the upfront cost, which is typically $11,080 for a 4 kW system – but this initiative means the average homeowner only needs to pay $7,756.

With an average annual saving of $821, you’ll break even in 9.4 years, meaning you’ll have more than 15 years to make pure profit on your panels.

The scheme has received bipartisan support from multiple governments since it was passed into law in 2005 under the Energy Policy Act 2005, and will be in place until at least 2035.

The Energy Efficient Mortgage Program is an excellent way to fold the otherwise expensive purchase of solar panels into an even more costly process of buying a home.

If you’re getting a mortgage worth hundreds of thousands of dollars to buy a house, another $7,000 to $15,000 for a solar panel system won’t make much difference – and it’ll enable you to generate free, clean energy for years to come.

Which states have the best government assistance for solar panels?

If you’re lucky enough to live in these states, you’ll be able to access the best level of additional help from your local government.

And if you’re not in these states, you might want to consider them for your next home.

Oregon

If you live in the Beaver State, you’re in luck.

Firstly, you can access a second mortgage loan under the FHA PowerSaver scheme, which will allow you to take out up to $25,000 so you can afford a solar panel system.

The FHA will even guarantee up to 90% of this loan, which means you can get a loan to go solar even if you’re not buying your house at the same time. The only other place this is available is Washington state.

Secondly, Oregon is one of 17 states where you can access net metering – which enables solar panel owners to get paid for the energy they create but don’t use.

This amount is taken off your monthly electricity bill – so if you generate more electricity than you use, you’ll only pay the basic utility service charge of about $12.

You’ll also get a credit for future months, meaning the excess solar energy you generate when the sun is shining in better weather can help cut your costs when Oregon’s winter clouds roll around.

And there are loads of other grants on offer from energy companies, cooperatives, and cities within the state, depending on where you live.

Massachusetts

Massachusetts has plenty to be proud of, from Harvard and Yale to Plymouth Rock and the New England Patriots – and now it can add excellent solar panel grants to that list.

Homeowners in the Bay State can enjoy a property tax exemption for 20 years on the value added to their property by a set of solar panels.

And you’ll also be able to save money via Massachusetts’ sales tax exemption on solar panels.

Considering the state’s sales tax is currently 6.25%, this will cut the cost of the average price of solar panels by $693.

Property tax exemptions exist in a total of 36 states, while sales tax exemptions on solar panels apply in 25 states – so even if you don’t live in Oregon or Massachusetts, your state may still be able to help you with solar panel costs.

Minnesota

As well as being 100% exempt from sales and property taxes for their solar panel purchases, Minnesotans can also benefit from renewable energy certificates.

The North Star State – as well as 42 other states and territories – has Renewable Portfolio Standards it must meet.

This means Minnesota has to ensure a certain percentage of its electricity comes from renewable sources.

One way it achieves this is by purchasing renewable energy certificates from local residential solar panel owners.

Your local government will buy these certificates – which you can earn for every 1,000 kWh of solar power you generate – to meet its required level of green energy.

Is there more assistance planned in the future?

There aren’t any solar panel government grants on the horizon, but help is still on the way.

In 2022, the Biden administration pledged $56 million to support the solar panel industry, in an effort to grow domestic production and lower the country’s reliance on China.

The funding will help improve the US’s solar panel manufacturing process, reduce manufacturing costs, and increase the amount of hardware that’s recycled and reused – all of which should bring down the price of solar panels for consumers.

There aren’t any solar panel government grants on the horizon, but help is still on the way.

In 2022, the Biden administration pledged $56 million to support the solar panel industry, in an effort to grow domestic production and lower the country’s reliance on China.

The funding will help improve the US’s solar panel manufacturing process, reduce manufacturing costs, and increase the amount of hardware that’s recycled and reused – all of which should bring down the price of solar panels for consumers.