Florida Solar Tax Credits, Incentives and Rebates (June 2023)

Florida has ranked among the top three states to go solar since 2019, with enough solar installed to power over 1.2 million homes across the Sunshine State, according to the Solar Energy Industries Association (SEIA). In addition to its abundant sunshine, homeowners can take advantage of several solar incentives in Florida.

We at the Guides Home Team have researched the top solar incentives available in Florida to help you save on the cost of solar panels. From solar sales tax and property tax exemptions to net metering and other local benefits, see how you can save money on your solar installation and, in turn, your energy bills.

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:

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.

As of 2023, Florida offers a sales tax exemption and a property tax exemption for solar energy systems. Solar rebates and grants are not currently available in Florida.

Florida introduced a sales tax exemption for solar energy and combined heat and power (CHP) systems in July 1997. The incentive was originally slated to only last five years, but the state converted the sales tax exemption into a permanent benefit. The sales tax exemption applies to the following:

Floridians don't pay sales tax when purchasing a solar energy system, regardless of the size of your system. However, you must use solar equipment certified by the Florida Solar Energy Center to qualify for the exemption. The solar sales tax exemption does not involve a complex process — you are simply not charged the 6% sales tax when purchasing an eligible solar panel system in Florida.

The following table shows how much you could save with the 6% sales tax exemption when purchasing a home solar system in Florida:

*The above figures are based on the state pricing data from Ecowatch of $2.53 per watt of installed capacity.

Home improvements can increase the assessed value of your property, which normally means you have to pay higher property taxes. However, Florida has the Property Tax Abatement for Renewable Energy Property, so you are not taxed for any increase in home value after installing solar panels. This exemption works as follows:

So say you own a $400,000 home in a Florida county with a 1.02% property tax, equivalent to $4,080 per year. Even though your home value increases to $425,000 after installing solar panels, your annual property tax will remain at $4,080. Comparatively, another home upgrade of the same value ($25,000) would add $255 to your annual tax burden.

As of 2023, 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.

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.

The amount of electricity your solar panels produce depends on the available sunshine. Solar PV systems tend to reach their highest output around noon, and there are times when energy production will exceed your home consumption. With net metering, you can earn credits towards your utility bill by sending that excess solar energy to the local electric grid. Here's a breakdown of how net metering works:

Florida Power & Light (FPL) and Duke Energy are the two largest electric utility companies in the Sunshine State, and both offer net metering programs. These utility companies offer net metering for solar power systems up to 2,000 kW of capacity, which is hundreds of times larger than the typical home installation.

The state classifies homeowners who participate in net metering into three tiers based on their solar system capacity. This determines your application fees and insurance requirements, as shown in the following table:

Since home solar systems are typically below 10 kW, most homeowners can participate in Florida's net metering programs without an application fee or an insurance requirement.

To participate in a net metering program, solar owners must meet the following eligibility requirements:

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.

The state of Florida sees abundant sunshine, as you can see in the World Bank Global Solar Atlas. If you click on locations throughout the state, the Atlas shows that each kilowatt of solar capacity generates 1,500 to 1,700 kWh of energy per year. Based on this range, you can expect a 5 kW home solar system to produce between 7,500 and 8,500 kWh of energy, depending on the exact location in Florida.

The U.S. Energy Information Administration reports monthly electricity prices by state, and the latest data shows an average price of 14 cents per kWh for residential consumers in Florida. Based on this value, a solar output of 7,500 to 8,500 kWh per year could result in power bill savings ranging from $1,050 to $1,190.

Florida residents can expect to pay around $15,180 for a 6 kW home solar system. However, you could get back $4,554 within a year thanks to the 30% solar federal tax credit, reducing your net system cost to $10,626. You can expect a payback period of nine to 10 years, which might seem long at first, but consider that quality residential solar panels have a life expectancy of 25 to 30 years. In other words, the service life of your panels is three times longer than your payback period, after which you’ll see a direct return on your investment.

By investing in solar panels, you can take advantage of Florida's abundant sunshine using a clean energy source that will last for decades. Florida offers a favorable net metering policy for home solar systems, in addition to sales tax and property tax exemptions. These local incentives can be combined with the 30% solar federal tax credit, which is available nationwide.

The best solar companies are highly familiarized with net metering and incentive programs throughout the U.S. and will make sure your home solar system qualifies for any solar energy credits, exemptions or rebates in Florida.

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.

Leonardo David is an electromechanical engineer, MBA, energy consultant and technical writer. His energy-efficiency and solar consulting experience covers sectors including banking, textile manufacturing, plastics processing, pharmaceutics, education, food processing, real estate and retail. He has also been writing articles about energy and engineering topics since 2015.

Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York's Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.