Florida residents can take advantage of multiple solar incentives in the state, from the federal tax credit to property and sales tax exemptions.
Florida Solar Tax Credits, Incentives and Rebates (May 2024)
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To see if you can save money on solar installation in Florida, the MarketWatch Guides team researched the state’s top solar incentives. Florida offers sales tax and property tax exemptions for solar panel systems. Homeowners can combine both incentives with the 30% federal solar tax credit for additional savings.
Florida also has a statewide net metering policy, allowing solar homeowners to get paid for generating excess solar power. With Florida’s sunny climate, solar panels usually reach a higher energy output than in many other regions of the country, which can result in more excess energy production.
Florida State Solar Incentives
Our team researched the local solar market to learn more about incentives available in Florida. As of 2024, the state offers the following solar incentives:
Solar Sales Tax Exemption
- Estimated savings: 6% of solar energy system costs
- Frequency: One-time
- How to claim: Applied automatically at purchase
Florida introduced a sales tax exemption for solar energy and combined heat and power (CHP) systems in 1997. The sales tax exemption was initially supposed to last five years, but the state converted it into a permanent benefit. The solar incentive applies to the following technology:
- Solar photovoltaic (PV) systems
- Solar water heaters
- Combined heat and power systems
This incentive does not involve a complex application process — you simply do not get charged the state’s 6% sales tax when you buy an eligible solar system in Florida. However, to qualify for this benefit, the Florida Solar Energy Center must certify your equipment.
The following table shows how much you can save on sales tax when buying a home solar system. We based the below calculations on the average cost to buy a solar system across various sizes in kilowatts (kW).
System Size | System Cost | Sales Tax Savings (6%) |
5 kW | $16,550 | $993 |
6 kW | $19,860 | $1,192 |
7 kW | $23,170 | $1,390 |
8 kW | $26,480 | $1,589 |
9 kW | $29,790 | $1,787 |
10 kW | $33,100 | $1,986 |
Property Tax Abatement for Renewable Energy
- Estimated savings: Varies based on your property tax rate
- Frequency: Annual tax savings
- How to claim: Automatically excludes your solar system value from property taxes
Home improvements can increase the assessed value of your property, which typically translates into higher property taxes. However, Florida has a Property Tax Abatement for Renewable Energy Property, so you do not get taxed for any increase in home value after installing solar panels.
In other words, your property taxes remain unchanged if your home becomes more valuable because of a solar panel installation. This incentive, introduced in 2013, is available through the end of 2037. Here’s how the exemption works:
For this example, suppose you own a $400,000 home in Florida in a county with a 1% property tax rate, which equals $4,000 a year in property tax.
- If your home value increases to $430,000 after installing solar panels, your annual property tax would remain at $4,000.
- Without the sales tax incentive, you would have to pay taxes on the added $30,000 in value — $300 more.
Property Assessed Clean Energy Financing (PACE)
- Estimated savings: Varies based on your loan
- Frequency: One-time
- How to claim: Online application
The Property Assessed Clean Energy (PACE) program is a financing option for solar panel systems and other home upgrades. Unlike a traditional loan, which borrowers pay back directly to the lender, borrowers of a PACE loan pay it back alongside their property taxes. Here are more details about the program:
- According to the Florida PACE Funding Agency, interest rates range from around 6% to 12.99%.
- The closing fee is typically 6.99% with no down payment.
- PACE loans have terms of up to 20 years.
- There are no prepayment fees if you pay off the loan early.
Solar experts recommend PACE financing only if you do not plan to sell your home during the loan term. Because the lender ties the loan to your property taxes, it places a lien on your home.
If you want to sell your home, you must find a buyer willing to assume the PACE loan and its lien. PACE loans have no prepayment penalties, and you can remove the lien by paying the remaining balance early.
Solar and Energy Loan Fund (SELF)
- Estimated savings: Depends on your loan
- Frequency: One-time
- How to claim: Online application
The Solar and Energy Loan Fund (SELF) offers home improvement loans that range from $3,000 to $25,000. These loans carry interest rates of 5% to 9.99% with repayment periods of three to 10 years. Eligible home upgrades include:
- Air conditioning
- Health and safety
- Lighting
- Photovoltaic panels and other types of solar energy systems
- Roofing
- Sewer and water
- Storm resilience
- Weatherization and insulation
The SELF program started in St. Lucie County in 2010 as a result of a $2.9 million grant from the U.S. Department of Energy. Because of the program’s success, it later expanded to the rest of Florida.
Local Solar Incentives
As of 2024, Florida does not have incentive programs covering specific regions or cities, beyond the statewide programs discussed above. So you will not qualify for additional incentives just for living in Orlando or Tampa, for example. The Jacksonville Electric Authority (JEA) used to offer a $4,000 rebate program for solar battery storage systems, but the incentive has been removed from their official website. However, JEA still offers incentives for energy efficiency and solar water heating in Jacksonville.
How To Claim Local Incentives
Solar programs are constantly changing, and governments can introduce new incentives at any time. Before installing a rooftop solar system in Florida, check that you are not missing out on any local incentives. You should check trusted references such as city and county government websites and your local utility company website. You can also ask your solar installer since companies keep track of all available financial incentives.
Florida Net Metering Explained
Net metering is an electricity billing method designed to benefit solar owners. With net metering, you can send excess solar energy generation back to the grid in exchange for billing credits to cover your nighttime consumption. Along with the national tax credit, net metering is a key incentive for homeowners looking to invest in a solar system. Over time, net billing can save solar panel owners thousands of dollars.
Florida makes net metering available from the state’s four investor-owned utilities (IOU), which provide electricity for 75% of the state’s population. These electric companies must offer solar homeowners net metering. Participating utilities include:
- Duke Energy
- Florida Power and Light
- Florida Public Utilities
- Tampa Electric Company
The rest of Florida’s residents get electricity from smaller municipal utilities and electric cooperatives, which are not subject to the net metering policy. However, many of the small companies offer net metering voluntarily.
The Florida Public Service Commission (PSC) has an updated list of all the electric utilities with net metering programs. Check here to see if your area is covered.
With net metering, if your solar panels generate more electricity than what your home uses, you can sell excess production to the local electric company. This transaction is especially helpful if you are away from home during the day and cannot use solar energy directly. Without net metering, you could not sell surplus solar production, which would effectively go to waste. You would have to have a home battery to store the extra energy, and a battery can cost $12,000 or more.
Here’s a quick example to show you how net metering works:
- A 6 kW home solar system can generate around 9,300 kilowatt-hours (kWh) of electricity per year in Miami, according to the National Renewable Energy Laboratory’s (NREL) PVWatts Calculator.
- If your total daytime consumption during a year is only 5,000 kWh of energy, Florida Power and Light, for example, would give credit for the remaining 4,300 kWh sent to the grid.
- That amount gets subtracted from your nighttime usage when you must rely on the grid because you cannot use solar panels, and lowers your power bill.
How To Enroll in Net Metering
To participate in a net metering program, solar owners must meet the following eligibility requirements:
- Florida solar panel systems must meet the National Fire Protection Agency (NFPA) National Electrical Code.
- Your system must have a UL 1741 solar inverter capable of disconnecting from the grid during a power outage or a visible disconnect switch.
- You must have a bidirectional power meter installed by the local utility company.
- You must have approval from a qualified local inspector.
If applicable, solar PV system owners must pay the application fee and show proof of liability insurance to participate in net metering. This requirement does not apply to solar systems below 10 kW, which includes most residential installations.
To participate in a net metering program, solar owners must meet the following eligibility requirements:
- Florida solar panel systems must meet the National Fire Protection Agency (NFPA) National Electrical Code.
- Your system must have a UL 1741 solar inverter capable of disconnecting from the grid during a power outage or a visible disconnect switch.
- You must have a bidirectional power meter installed by the local utility company.
- You must have approval from a qualified local inspector.
If applicable, solar PV system owners must pay the application fee and show proof of liability insurance to participate in net metering. This requirement does not apply to solar systems below 10 kW, which includes most residential installations.
Federal Solar Tax Credit
The federal solar tax credit, officially called the Investment Tax Credit or ITC, is a nationwide incentive that allows you to claim a tax credit for your solar installation costs. The credit offers solar owners a tax deduction equivalent to 30% of their total system costs. You can combine it with other local incentives, such as sales tax and property tax exemptions in Florida.
The solar federal tax credit dropped to 26% in 2020, but the Inflation Reduction Act restored the original 30% rate in 2022. The credit will remain available through 2034 before being phased out according to the following schedule:
- The credit will decrease to 26% in 2033
- The credit will decrease to 22% in 2034
- Unless renewed by Congress, the credit will phase out entirely in 2035
You can only claim the credit once for the tax year you install solar. So assuming you install a 5-kilowatt (kW) home solar system for $13,000, the applicable ITC is $3,900. You can deduct this amount from your next annual federal tax declaration. If the tax credit is higher than the amount of taxes you owe, you can apply the difference the following year.
The solar investment tax credit for residential owners is covered in Section 25D of the U.S. Internal Revenue Code, while the solar tax credit for businesses is covered in Section 48.
Estimated Solar Savings in Florida
If you install a 6 kW solar system on a Florida property that receives good sunshine conditions, you can generate around 9,766 kWh of energy per year, based on our calculations. At Florida’s average residential electricity tariff of 15.26 cents per kWh, you would save $1,490 on power bills a year.
A 6 kW home solar system has a typical price of $19,860 in Florida, but the net cost drops to $13,902 after applying the 30% federal tax credit. If your solar panels saved you $1,490 per year, you could achieve a payback period of 9.3 years. If this seems like a long time, consider that quality solar panels have manufacturer warranties lasting 25 or more years. By the time you recover your investment, your solar system will have a guaranteed life of at least 15.7 years — meaning you can gain nearly 16 years of direct savings.
In addition to electricity savings, you can also see an increase in your home’s value. The increased value is fully exempt from property taxes in Florida. The NREL estimates the property value increase after going solar is equivalent to 20 times your annual energy savings. So if you were saving $1,490 in energy costs per year, your home value would go up by nearly $30,000.
Frequently Asked Questions About Florida Solar Incentives
Homeowners can take advantage of a sales tax exemption and a property tax exemption when installing solar panels in Florida. The state also offers a favorable net metering policy that compensates you when your panels generate excess power that gets sent back to the grid.
Florida does not have a state income tax, which means there are no local tax credits for solar power. However, you can claim the nationwide federal solar tax credit, which equals 30% of your total system cost.
There are no programs that offer free solar panels in Florida. However, some solar panel financing options allow you to go solar at zero upfront cost, including a solar loan or lease. You can then pay the solar loan or lease over time using your energy bill savings.
With solar panels, Florida homeowners can take advantage of the state’s abundant sunshine — and a 6 kW home solar system can save you over $1,000 on energy bills per year.
You can also participate in the state’s net metering programs, which give you power bill credits for any excess solar energy your panels generate. Plus, since Florida has a property tax exemption for solar panels, going solar can increase your home value without raising your property taxes.
More Florida Homeowner Resources
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