How can solar be more affordable to me?

According to residents, upfront costs are the primary inhibitor for solar panel adoption. The upfront costs of solar energy are relatively expensive in comparison to remaining on a traditional utility supplier. However, the average payback of the solar investment is only five to ten years in comparison to a lifetime reliance on a utility company. After payback is complete, the homeowner will begin making money from their system for all of the energy that is produced.

To offset these expensive upfront costs, there are a number of federal, state and local solar incentives available to the homeowner of the solar panel systems. These incentives can reduce solar costs by 30-50 percent. (Note: the solar incentives discussed here do not apply if the homeowner leases the system, as the third-party owner would receive the solar incentives.)

Photo courtesy of American Society of Engineers (ASME.ORG)


Available federally, there is the Federal Investment Tax Credit (ITC). This incentive allows the homeowner to claim a 30 percent credit on qualified equipment and installation expenditure, and is available to all eligible homeowners who have commenced construction through 2019. In 2020, the ITC will drop down to 26 percent, and in 2021, the ITC will drop down to 22 percent. After 2021, the residential credit will drop to zero percent, which is why it is important to take advantage of this incentive as soon as possible.


In addition to the Federal ITC, each state has their own unique solar incentives to further support residential adoption of solar panel energy systems. In Wisconsin for example, there are two solar panel system incentive programs: the Focus on Energy Renewable Energy Incentive Program, which provides a rebate of up to 12 percent of solar costs (not exceeding $2,000), and the Renewable Energy Sales Tax Exemption Program, which provides a 100 percent exemption from sales and use tax for eligible solar panel system purchases.


Depending on your state, municipality, and/or utility company, you may also be able to take advantage cash rebates, Solar Renewable Energy Certificates (SRECs), or Performance-Based Incentives (PBIs). SERCs exist as a result of the renewable portfolio standard (RPS), which requires utilities in certain states to produce a specific percentage of electricity from renewable energy. Nearly 30 states participate in RPS, and depending on the homeowner’s utility company the homeowner can earn up to $300 in certain markets.

PBIs allow a state or utility to pay the solar energy system owner a per kilowatt-hour credit for the electricity that their system produces; PBIs are not sold through the market as the incentive rate is determined when the system is installed. The purpose of this incentive is to encourage system owners to focus on proper installation, maintenance and performance of their solar system.

To take advantage of the residential solar incentives near you, go onto the Database of State Incentives for Renewables & Efficiency (DSIRE).

By: Natalie McClaine

Photo courtesy of

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