All Energy Solar

Why Do Utilities Offer Solar Rebates?

In 2019, the world added more renewable energy than any other source, with solar and wind representing 45% of all new capacity. As the global focus on energy independence and environmental responsibility grows, and demand for clean renewable energy rises, policymakers globally, nationally, and locally are creating programs that increase production to feed this demand.

FBImage_WhydoUtilitiesOfferIncentivesAre utilities friends or foes of solar?

Utility companies are in the business of producing and distributing electricity across the grid. Generally, most utilities are “friends” of renewable sources of energy—so long as they can control the supply. As a result, many—but not all—utility companies are resistant to aggressive policies that take the ownership of production out of their hands and place it into those of independent property owners. 

Policies that drive rebates

Renewable Portfolio Standards (RPS) are requirements placed on utility companies by states to produce or source a specific amount of the energy they generate or sell from renewable sources. Currently, 30 states and Washington D.C. have RPS policies in place. As a result of these policies, many utility companies have created programs and incentives designed to motivate customers to invest in the infrastructure required to produce energy from renewable sources such as solar. 

The majority of states in the U.S. currently have a mandatory net metering program. Net metering is a collection of mandated policies that require the utility to allow independent property owners to install qualifying solar photovoltaic systems on their property and connect it to the utility’s distribution grid. Many state’s net metering requirements also allow customers to sell their excess electricity back to the utility for a profit. 


Programs offered by utility companies

In an effort to comply with a state’s RPS, many utilities offer Solar Renewable Energy Certificates (SRECs). This is a form of incentive that allows homeowners to sell certificates for energy to their utility. Additionally, some utilities have adopted rebate programs designed to help them achieve specific “carve-out” goals, set by their state, for renewable energy sources such as solar. These rebates are generally a one-time payout for a qualifying system based on the energy estimated or actual production. It’s important to note that these programs are generally reviewed on an annual basis, and funds are set aside based on a utility’s need to achieve an established goal or comply with their state’s minimum requirements. As a result, most incentives and rebates offered by utility companies will likely go away once they have met the requirements set forth by their state. 

To learn more about solar rebates, read our eBook on Solar Incentives & Rebates.

Download our eBook, Solar Incentives & Rebates, to get a better understanding of what financial incentives are related to you and how you can take advantage of them before you install solar.  eBook_CTA_SolarIncentives&Rebates



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