Are incentives available to help reduce the cost?

Yes, many states offer incentives. For specific information, call one of the contacts listed under “Getting Help”. Another excellent source is the National Database of State Incentives for (DSIRE). Prepared by the North Carolina Solar Center, this database contains information on financial and regulatory incentives that promote energy technologies.

Net Metering

In more than 35 states, customers who own photovoltaic systems can benefit from laws and regulations that require “net” electric meter reading. The customer is billed for the net electricity purchased from the utility over the entire billing period—that is, the difference between the electricity coming from the power grid and the electricity generated by the photovoltaic system. Through net metering, the customer obtains the full retail electricity rate—rather than the much lower wholesale rate—for kilowatt-hours of PV-produced electricity sent to the utility power grid. The benefits of net metering to consumers are especially significant in areas such as Hawaii and New York, which have high retail electric rates. Utilities also benefit because the solar-generated energy often coincides with their periods of “peak” demand for electricity.

Property and Sales Tax

Tax incentives may include a sales tax exemption on the photovoltaic system purchase, a property tax exemption, or state personal income-tax credits,4 all of which provide an economic benefit to consumers by lowering high capital . The U.S. government also provides financial support for photovoltaic technology through a tax credit for commercial uses of solar energy. This energy investment credit provides businesses (but not individuals or utilities) with a 10% tax credit and 5-year accelerated depreciation for the of equipment used to generate solar electricity.


Rebates and buy downs, typically based on the rated power of the system, help to defray high capital costs and to create competitive, sustainable market growth. In the United States, the U.S. Department of Energy has been involved in a program known as TEAM-UP, or Technology Experience to Accelerate Markets in Utility Photovoltaics. Through this program, some 80 utilities in 40 states have installed more than 7 megawatts of grid-connected PV; supplier buy downs and consumer rebates range between $2 and $4 per watt.

Residential Energy Rate

This is the average retail residential rate for energy from utilities, in cents per kilowatt-hour. Check your utility bill for your actual rate.