2024 Solar Incentives Guide for Richmond, KY - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Richmond?

Source: https://www.dsireusa.org/

Solar incentives encourage homeowners to switch their home over to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Various types of incentives, including cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be provided via the Kentucky government, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:

• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. Rebates may be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you've signed a net metering agreement with your Richmond utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
• Tax Exemptions: Your solar system might qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your house.

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Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of your solar system's cost.

The ITC is applied to the total cost of solar system installation, including the panels themselves as well as accessories, equipment and labor. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

To better understand how the ITC will apply to you, speak to your local Richmond solar panel installer and ask for more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. The percentage will then decrease yearly until the Clean Energy Credit expires in 2035. The program expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit might apply to you is to talk with your local Richmond solar panel installers.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. As with federal incentives, these may include tax credits, rebates and more. Incentives may be offered by the state of Kentucky, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Richmond

The variety of solar incentives available has helped tremendously increase the adoption of solar energy nationwide over the last 15 years. You might qualify for solar incentives from the Kentucky government, the federal government or your local utility company. We suggest talking to your local Richmond solar installation company for more information about these incentives and to ensure that you're getting the most money possible for your solar panels.