Solar Incentives: How to Save Money on Solar
Panels
Going solar is a smart investment, but the upfront cost can feel overwhelming. That’s where solar incentives come in. From tax credits to rebates and grants, these programs can save you thousands of dollars on your solar panel installation.
At RAR Energy, we’ve helped homeowners across Minnesota take advantage of these incentives. In this guide, we’ll break down everything you need to know about solar subsidies, rebates, and tax credits, so you can save money while going green.
What Are Solar Incentives?
Solar incentives are financial benefits provided by federal and state governments to encourage the installation of solar energy systems. These incentives aim to reduce the initial costs of solar panel installations, making renewable energy more accessible to homeowners and businesses.
Understanding Solar Subsidies, Rebates, and Tax Credits
Solar incentives are financial benefits offered by governments, utilities, and organizations to encourage solar adoption. They come in three main forms:
- Rebates: Cashback after installation.
- Tax Credits: Reductions in your tax bill.
- Grants and Subsidies: Direct funding for solar projects.
Stat: Solar incentives can reduce installation costs by 30-50% (SEIA).
Why Governments Offer Solar Incentive Programs
Governments want to promote clean energy and reduce carbon emissions. By offering incentives, they make solar more affordable for homeowners and businesses.
Minnesota Example: The state aims to get 100% of its electricity from renewables by 2040 (Minnesota Department of Commerce).
Types of Solar Incentives
Solar Panel Rebates
Solar panel rebates are immediate reductions in the price of your solar system. For example, some utilities in our service area offer rebates that can save you hundreds or even thousands of dollars on your installation.
Tax Incentives for Solar Panels
The most significant tax incentive is the federal solar investment tax credit (ITC). As of 2025, this credit allows you to deduct 30% of the cost of your solar installation from your federal taxes. This incentive is available through 2032, making now an excellent time to go solar.
Solar Grants and Subsidies
Grants are free money for solar projects, often targeting low-income households or nonprofits.
Stat: The USDA’s REAP program offers grants up to $500,000 for rural solar projects (USDA).
Government Solar Incentive Programs
The federal government leads with the Solar Investment Tax Credit (ITC), but states also offer their own programs.
Example: Minnesota’s Solar*Rewards program pays $0.10 per kWh for solar energy produced (Minnesota Department of Commerce).
Solar Panel Incentives by State
Each state we serve has its own set of incentives:
| State | Rebates | Tax Credits | Grants |
| Minnesota | $500+ | 30% ITC | Solar*Rewards |
| Wisconsin | $300+ | 30% ITC | Focus on Energy |
| Iowa | $200+ | 30% ITC | None |
Are There Government Subsidies for Solar Panels?
Yes, government subsidies for solar panels exist in various forms. The ITC is the most widespread federal subsidy, while state-level subsidies vary. For instance, some states offer property tax exemptions for the added value of solar installations.
How to Qualify for Solar Incentives
Solar Rebate Eligibility
Eligibility for solar rebates often depends on factors like:
- Location: State and utility programs vary.
- System Size: Larger systems often qualify for bigger rebates.
- Income Level: Some programs target low-income households.
Steps to Apply for Solar Subsidies and Grants
- Research Programs: Check DSIRE or your state’s energy office.
- Gather Documents: Proof of income, system specs, and receipts.
- Submit Applications: Work with your installer for accuracy.
Our Help: At RAR Energy, we handle the paperwork so you don’t have to.
How to Qualify for Free Solar Panels
Some programs offer free solar panels to low-income households. For example, Minnesota’s Low-Income Solar Program provides free or discounted systems (Minnesota Department of Commerce).
Benefits of Solar Incentives
Reducing Solar Panel Installation Costs
Incentives can cut your upfront cost by 30-50%, making solar more affordable.
Encouraging Renewable Energy Adoption
Incentives help more people switch to clean energy, reducing carbon emissions.
Long-Term Savings with Tax Incentives
Tax incentives like the ITC not only reduce upfront costs but also accelerate your return on investment, leading to greater long-term savings.
What Incentives Are Available for Solar Panels?
Current Federal and State Solar Programs
- Federal ITC: 30% tax credit through 2032.
- State Rebates: Vary by location (e.g., Minnesota’s Solar*Rewards).
Comparing State Solar Tax Credits
State solar tax credits can provide additional savings beyond the federal ITC. For example:
- Illinois offers a rebate of $300 per kilowatt of installed capacity
- Iowa provides a state tax credit of 15% of the federal credit amount
Can You Still Get Government Grants for Solar Panels?
While direct grants for individual homeowners are less common, some local governments and utilities offer grant-like programs. It’s best to check with local authorities or consult with a solar installer like Rare Energy for the most up-to-date information.
How Much Rebate Can You Get for Solar Panels?
Factors That Determine Solar Reimbursement Amounts
- System Size: Larger systems = bigger rebates.
- Location: State and utility programs differ.
- Income Level: Low-income households may qualify for more.
What Affects Solar Incentive Eligibility?
Eligibility for solar incentives can be affected by:
- Homeownership status
- Type of property (residential vs. commercial)
- Your tax liability (for tax credits)
- The specific requirements of each program
Conclusion
Solar incentives make going solar more affordable than ever. From the Federal ITC to state rebates and grants, these programs can save you thousands of dollars.
At RAR Energy, we help homeowners across Minnesota, Wisconsin, Iowa, and Illinois navigate these incentives. Whether you’re in Minneapolis, Rochester, or Saint Paul, our team will ensure you get the most savings.
