Cost + savings
State incentives + net metering, explained
Solar incentive programs vary widely by state, utility, and even ZIP code. The biggest financial lever is whether your utility offers net metering, and at what rate. The second biggest is whether your state runs an SREC (Solar Renewable Energy Credit) market or a rebate program.
Below is a clean breakdown of what each incentive type does, how to find what your address qualifies for, and the year-over-year economics that follow.
Net metering — the most important incentive in most markets
Net metering is the rule that says your utility credits you for solar you export back to the grid. There are three flavors:
| Type | Credit rate | Where you'll find it |
|---|---|---|
| Full retail (1-for-1) | Same rate you pay | California (NEM 2.0 grandfathered), parts of Massachusetts, Vermont |
| Net billing | Wholesale or avoided-cost rate | California (NEM 3.0), most of Texas, Arizona |
| Buy-all/sell-all | Two separate rates | Some Texas co-ops, parts of Florida |
State rebate programs
Some states offer one-time rebates per watt of installed solar. These are paid by the state energy office or the utility, usually as a check after the system is permitted and operating. Examples in 2026:
- Illinois Shines / IPA — state-run program with up-front payments tied to system size.
- New York NY-Sun — declining block grants based on residential vs. commercial.
- Massachusetts SMART — production-based incentive paid quarterly for 10 years.
SREC markets
An SREC is a Solar Renewable Energy Credit — one credit per megawatt-hour your system produces. Some states (PA, NJ, MD, DC, MA) have markets where utilities buy SRECs from homeowners to meet renewable portfolio standards. Prices fluctuate. Texas does not have an active SREC market as of 2026.
Federal credit conversation
The federal Residential Clean Energy Credit is a separate question your CPA should evaluate based on your tax situation. We do not provide tax advice — we focus on designing and installing the system. Bring your CPA into the conversation early so they can model your specific situation.
How to find what your address qualifies for
- Your free Kaizen design includes the net metering rate your specific utility offers — we look it up for every quote.
- DSIRE (dsireusa.org) is the federal database of state and utility incentives, free to search by ZIP code.
- Your utility's website usually has a 'distributed generation' or 'rooftop solar' page with the current rate sheet.
Common questions
Frequently asked
- Does Texas have net metering?
- It depends on your utility. Some Texas co-ops and municipal utilities (Austin Energy, CPS Energy in San Antonio) offer net metering or net billing programs. Most retail electric providers (REPs) in deregulated Texas markets do not — instead they offer 'buy-back' plans at varying rates. Your free Kaizen design includes the actual rate for your address.
- Can incentives change after I install?
- Federal credits are locked at the year the system is placed in service. State and utility programs can change, but most are grandfathered for 10-25 years once you enroll. SREC markets fluctuate quarterly.
- Do I have to claim incentives, or does Kaizen do it?
- We file the utility interconnection paperwork that gets you onto the net metering or net billing program. Federal tax credits and state rebates are filed by you (or your CPA) on your tax return. We provide the documentation you need.