Energy Incentive Finder

Energy incentives come in several forms, and understanding the difference is crucial for maximizing your savings. Tax credits directly reduce the amount of federal or state income tax you owe. If you owe $10,000 in taxes and claim a $7,500 EV tax credit, you only pay $2,500. This is far more valuable than a tax deduction, which only reduces your taxable income. The federal Residential Clean Energy Credit (for solar, wind, and battery storage) can even be carried forward to future tax years if your tax liability is too low in the installation year.

Rebates are direct payments (usually a check or account credit) from state agencies or utilities. They are typically applied for separately and may have first-come, first-served funding. Unlike tax credits, rebates do not depend on your tax situation, making them accessible regardless of income level. Many states offer both: for example, Massachusetts provides the SMART solar incentive (performance-based rebate) alongside the 15% state solar tax credit.

Sales tax exemptions and property tax exemptions provide ongoing savings. A sales tax exemption on a $40,000 solar system in New Jersey saves approximately $2,650 at the point of purchase. Property tax exemptions ensure that adding solar panels does not increase your annual property tax bill, even though they typically increase home value by 3-4%. The best strategy is to stack all available incentives: claim the 30% federal ITC, apply for state rebates, and benefit from tax exemptions simultaneously.

The Inflation Reduction Act (IRA), signed into law in August 2022, represents the largest investment in clean energy in American history. The law extended and expanded federal energy tax credits through at least 2032, providing unprecedented financial support for homeowners making the switch to clean energy. Before the IRA, the solar ITC was scheduled to drop to 0% for residential installations. The IRA restored it to 30% and added standalone battery storage eligibility for the first time.

The IRA also created the Energy Efficient Home Improvement Credit (formerly known as the 25C credit), which provides up to $3,200 per year for energy-efficient upgrades. This annual limit resets each tax year through 2032, meaning homeowners can strategically spread improvements over multiple years to maximize their total credit. For example, install a heat pump in year one ($2,000 credit), then upgrade windows and insulation in year two ($1,200 credit), and add an EV charger in year three.

Combined with state-level programs, the IRA makes clean energy upgrades more affordable than ever. A homeowner installing a $24,000 solar system with a $15,000 battery, a $12,000 heat pump, and purchasing a $40,000 EV could save over $30,000 in combined federal and state incentives. Use the calculator above to find the specific programs available in your state, and explore our Solar Savings Calculator and EV Savings Calculator to model your long-term financial returns.