Line of solar panels on a red shingle roof.

Solar Panels: Grants For Homeowners To Consider

Hanna Kielar4-minute read
PUBLISHED: July 12, 2022


Each year, more homeowners take advantage of the benefits that come with harnessing solar energy by adding solar panels to their property. However, with the average solar panel system costing an estimated $15,000 – $25,000 or more, installing these systems can be an expensive undertaking.

Through an increased effort by the United States Department of Energy (DOE) to promote renewable energy for all, grant opportunities have become available for eligible homeowners. Let’s dig into the facts about solar panel grants and how you may qualify for one.

What Grants Are Available For Solar Panels?

Over the last few decades, the U.S. government has explored ways to encourage property owners to install solar panels within their homes. Through partnerships with various agencies and departments, numerous grants have emerged to provide homeowners around the country with the necessary funding to complete these installations.

With solar panel grants, you can build new solar panel systems or make upgrades to your existing systems without having to pay the money back. These incentives provide funding to homeowners and businesses that need it the most.

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Government Grants For Solar Panels

The federal government doesn’t directly issue government-funded grants for clean energy upgrades; instead these grants are funded by partnerships with federal departments and local organizations. These groups include advocacy groups that focus on nonprofits, farms, tribes, schools and rural and low-income areas.

A government solar grant can help you transition to solar power, potentially lowering your electric bills over time and reducing your carbon emissions – benefitting you and the world around you.

Green Retrofit Grants

The Department of Housing and Urban Development (HUD) provides grants for homeowners living in qualifying low-income areas to build and maintain solar panel systems or other alternative energy sources. This money comes from a $250 million budget, and recipients must use these funds within two years of receiving them. You can learn more or apply for the program through the HUD Recovery website.

Tribal Energy Program

Through the DOE’s Office of Indian Energy Policy and Programs, tribes can receive a grant for assistance with fuel-neutral and technology projects. Energy-generating systems, measurements for solar systems on tribal buildings, and increases in energy infrastructure are among the projects eligible for this grant. In late 2019, $15 million in new funding was made available for the creation of new energy-efficient infrastructure on tribal lands. The National Renewable Energy Laboratory (NREL) has a useful guide on this program that you can use to learn more.

Rural Energy For America Program (REAP) Grants

The Rural Energy for America Program (REAP), under the U.S. Department of Agriculture (USDA), provides grants for farmers and small rural business owners to install solar power systems or upgrades to existing energy-efficient systems. Applicants may receive up to $20,000 if they qualify. Eligibility for this program requires a business owner to prove that 50% of their income is from agribusiness and that they can afford 75% of the project on their own. To learn more about this program or to apply, visit the USDA's REAP website.

High Energy Cost Grants

The USDA also offers high energy cost grants, which are used to offset the abnormally high energy costs that homeowners in rural communities may face. This fund can help these rural homeowners build new solar panel systems or improve existing ones. Eligibility requirements for a high energy cost grant include living in an area of a U.S. state or territory where electricity bills are 275% higher than they are on average nationwide. Although applications have not yet opened for the 2023 program, you can learn more about this initiative here.

Renewable Energy Grants

The U.S. Department of the Treasury offers renewable energy grants, also known as the 1603 program, to homeowners as reimbursement for solar panel installations. Once your system is fully installed and in service, you’ll need to begin repaying this grant. You can learn more and how to apply for one of these through the U.S. Treasury website.

Other Benefits And Incentives For Solar Panel Owners

While grants can help cover the cost of solar panels and their installation, owning a solar panel system may come with other fees. Thankfully, these additional costs can be at least partially offset by incentives and qualifying solar panel grants.

It’s important to also be aware that grant recipients who make the switch to solar aren’t eliminated from qualifying for other government incentives, rebates and tax credits. Here are a few of the incentives you may be eligible for in addition to grants:

  • Rebates: By using a grant to purchase solar panels, homeowners can reap the benefit of possibly qualifying for a solar panel rebate. If you’re a homeowner, this can reduce the cost of your system 10 – 20%. Typically, rebates tied to specific government programs are only available for a limited time.
  • Investment Tax Credit: The Investment Tax Credit (ITC) provides eligible homeowners with a 26% return on their investment in 2022 through a federal solar tax credit. This can help offset what you owe on your taxes if you qualify.
  • State tax credits: Depending on the state you live in, you may be eligible for a tax credit at the state or local level. You can use these credits alongside the federal ITC should you quality for that.
  • Performance-based incentives: With performance-based incentives (PBIs), a utility company or even some states may pay solar panel owners a per-kilowatt-hour credit for the electricity their system produces.
  • Solar Renewable Energy Certificates: Some states set a minimum for the amount of energy that must be produced through solar energy. Because of this, some states offer solar renewable energy certificates (SRECs) to property owners based on how much electricity their solar panels generate. The utility company will buy credits from you to help meet its monthly quota.
  • Tax exemptions: Not all states or cities include your solar panel system in your property tax assessment. The good news for you here is that your system may boost your home’s value without affecting your property taxes.

The Bottom Line: Grants For Solar Panels Can Help You Achieve Energy-Efficient Home Improvement Goals

If you’re a homeowner interested in making your home more energy-efficient, solar panel grants are a great way to subsidize the costs associated with buying and installing these systems. Through partnerships with the U.S. Department of Energy and other affiliated departments, numerous grant funds are available if you meet certain qualifications or reside within certain geographic areas.

In fact, once those grants and loans get you the system you need to maximize energy savings, you could even stand to make a profit by net metering the excess energy or selling SRECs back to your local utility company, if that’s an option in your area.

If you’re interested in learning more about adding solar panels to your home, consult a Rocket SolarSM expert today.

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Hanna Kielar

Hanna Kielar is a Section Editor for Rocket Auto℠, RocketHQ℠, and Rocket Loans® with a focus on personal finance, automotive, and personal loans. She has a B.A. in Professional Writing from Michigan State University.