Solar Incentives & the Federal Tax Credit
What cuts your installed cost, and how to read the numbers on this site.
The biggest single discount on a U.S. home solar system is the federal Investment Tax Credit (ITC). It is a credit against your federal taxes equal to a percentage of the system cost. This site shows the federal ITC as 30%, but tax policy changes — verify the current rate at IRS.gov and Energy.gov before you rely on it (figures on this site are as of 2026).
How the ITC changes your payback
The calculator applies the ITC to the gross installed cost before subtracting any state incentive: net = gross × (1 − ITC) − stateIncentive. A 30% credit on a $16,800 system removes about $5,040 from the cost you must recover through savings, which can take a year or more off the payback period.
State and utility incentives
On top of the federal credit, some states add their own. Examples reflected on this site's state pages include New York's NY-Sun program plus a 25% state tax credit, Massachusetts' SMART payments, and Illinois' Illinois Shines block incentive. Many utilities also offer one-time rebates instead of (or in addition to) net metering. Enter any state incentive as a dollar amount in the State incentive field.
Watch the expiration
Federal solar credits have phased down and been extended several times. Do not assume 30% is permanent; check the current percentage for the year you install. The state pages here are pre-filled with each state's typical numbers, but always confirm with your installer and the official sources.