Solar incentives by state in 2026, in one line: the 30% federal credit for homeowners ended on 31 December 2025, so state tax credits, rebates, SREC payments, tax exemptions and net metering are now the whole incentive stack – and they differ a lot by state. Last updated: 30 October 2026.
Solar Incentives by State: 2026 Comparison
| State | Main 2026 incentives | Guide |
|---|---|---|
| California | Property-tax exclusion for systems completed before 1 Jan 2027; net billing | California solar incentives |
| New York | 25% state tax credit up to $5,000; sales and property tax exemptions | New York solar incentives |
| New Jersey | SREC-II payments for 15 years; sales and property tax exemptions | New Jersey solar incentives |
| Massachusetts | SMART 3.0 payments; 15% state credit up to $1,000 | Massachusetts solar incentives |
| Pennsylvania | SREC income and net metering; no state credit | Pennsylvania solar incentives |
| Illinois | Illinois Shines REC payments; $300/kW ComEd and Ameren rebates | Illinois solar incentives |
| Arizona | 25% state credit up to $1,000; export credits | Arizona solar incentives |
| Colorado | Sales and property tax exemptions; retail-rate net metering | Colorado solar incentives |
| Florida | Sales and property tax exemptions; net metering | Florida solar incentives |
| Texas | Property tax exemption; local utility rebates (e.g. Austin Energy) | Texas solar incentives |
Solar incentives come in layers, and stacking them is how homeowners cut their cost by half or more. The federal layer is gone – the 30% residential credit (Section 25D) expired on 31 December 2025 (what changed). That makes your state rebates, tax exemptions, and performance payments the entire incentive stack in 2026. Here is how the states stack up in 2026.
The Four Types of Solar Incentives
- State tax credits (the federal 30% credit expired at the end of 2025).
- Rebates (up-front cash back).
- Tax exemptions (sales and property tax waived).
- Performance payments (SRECs / net metering) (you earn for what you produce).
Top Incentive States in 2026
| State | Why it stands out | Details |
|---|---|---|
| New Jersey | One of the most valuable programs in the U.S. (SuSI / SREC-II) plus tax exemptions | NJ incentives |
| New York | Strong state tax credit, rebates, and net metering | NY incentives |
| Massachusetts | State credit, SMART program, and high electricity rates | MA incentives |
| California | Highest volume; property-tax exclusion sunsets Jan 1, 2027 | CA incentives |
How to Stack Your Incentives
- Claim your state solar tax credit if your state has one (New York, Massachusetts, Arizona).
- Take any up-front rebate from your utility or state program.
- Confirm sales and property tax exemptions.
- Enroll in net metering and your state's SREC or performance program.
Without the federal credit, up-front incentives typically take a few thousand dollars off a $21,000 system, and SREC or performance payments add income over 10-15 years. The strongest states pair high electricity rates with performance payments.
Find Your State
- California solar incentives
- New York solar incentives
- New Jersey solar incentives
- Massachusetts solar incentives
- Pennsylvania solar incentives
- Illinois solar incentives
- Arizona solar incentives
- Colorado solar incentives
- Florida solar incentives
- Texas solar incentives
"Free Solar Panels in 11 States": Is It Real?
No state gives every homeowner free solar panels. The "11 states" (or "free solar in your state") ads are lead-generation marketing, and when you follow them you usually land on one of these:
- A $0-down lease or PPA. A company installs and owns the panels and you pay for the power, usually for 20-25 years and often with a yearly price escalator. Nothing is free - you pay monthly instead of up front. Compare: loan vs lease vs PPA.
- A $0-down solar loan. You own the system but repay the full price plus interest.
- Low-income programs. Some states run no-cost or deeply discounted solar for income-qualified households. The federal Solar for All grants that funded many of them were terminated by the EPA in August 2025 and are still being fought in court, so what is available depends on your state.
What homeowners can actually count on is the state layer below: tax credits, SREC payments, tax exemptions and net metering.
What States Have Solar Incentives?
Every state we cover offers at least one: a tax exemption, net metering, a rebate or performance payments. Among these 10, the states with a state solar tax credit right now are New York (25%, up to $5,000), Massachusetts (15%, up to $1,000) and Arizona (25%, up to $1,000). The states that pay you for what you produce are New Jersey, Pennsylvania, Illinois and Massachusetts. Compare them in the table at the top, or estimate your own numbers with the solar cost calculator.
Solar Incentives by State FAQ
Is there still a federal solar tax credit?
Not for a cash or loan purchase. Section 25D expired 31 December 2025. Section 48E still applies to leased and PPA systems through 2027, but the company that owns the system claims it, not you. State incentives are unaffected and still stack with each other. More: solar tax credit 2026.
Which 11 states get free solar panels?
None. "Free solar in 11 states" is ad copy, usually for a $0-down lease or PPA where you still pay for the power. Some states have income-qualified programs, but there is no list of states giving free panels to every homeowner. See the free solar myth above.
Which state has the best solar incentives?
New Jersey, New York, Massachusetts and Washington D.C. consistently rank near the top: they combine high electricity rates with state credits or performance payments.
Which states have a state solar tax credit?
Among the states we cover: New York (25%, up to $5,000), Massachusetts (15%, up to $1,000) and Arizona (25%, up to $1,000). California, Texas, Florida, Pennsylvania, New Jersey, Colorado and Illinois do not offer one for home solar.
Which states pay SRECs or performance payments?
New Jersey (SREC-II), Pennsylvania (SRECs), Illinois (Illinois Shines) and Massachusetts (SMART 3.0) pay you for the electricity your system produces.
Does every state have net metering?
No. Most states require it, but Texas has no statewide rule, California and Arizona credit exports below retail, and Illinois moved new systems to supply-only credits in 2025. See net metering explained.
Do incentives expire?
Yes. The federal residential credit ended at the end of 2025, California's property-tax exclusion is set to end for systems completed from 1 January 2027, and SREC and rebate programs close capacity blocks as they fill.
Related Guides
General guidance for 2026, not tax advice. Verify current rules for your state before purchasing.