When thinking about the best states in the US for solar power, it probably makes sense to have Texas, Florida, and Arizona on the list. But, Massachusetts and Maryland? Yes, and there’s more than just weather that determines whether a state is good for home solar power.
When you factor in state policies, financial incentives, and utility rates, more states are seeing the growth of solar capacity and more people can take advantage of savings with clean, renewable energy. We’ll cover some of the best states for going solar right now.
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States With the Most Solar Energy Potential
The sun shines in the American Southwest more than anywhere else year-round.
Although Florida is not far behind with its fair share of annual sun, parts of California, Arizona, New Mexico, Texas, Nevada, Utah, and Colorado can generally expect the most annual sunlight in the country and the highest solar energy potential.
Now, if you’re thinking solar is only for the sunniest places in the country, you would be mistaken. In reality, nearly every location in the US receives enough sunlight to generate usable solar power year-round, with possibilities for grid-tied solar panels or off-grid systems all over America.
So, what makes solar more valuable in certain states than others (besides sunlight alone)? Well, to save the most money on energy expenses, the best states for solar generally have:
- High retail residential electricity prices that can be offset by solar
- Local green energy tax incentives or rebates to reduce investment costs
- Net energy metering or net billing programs that compensate homeowners for solar energy shared with the grid
Great States for Going Solar in 2025
If you’re interested in solar panels, your home’s suitability for solar is more important than your state’s. If you don’t live in one of the states below, solar could still work for you. (If you do live in one of them, solar might not.)
We’ll highlight some of the things in these states that benefit people going solar, whether it's available sunlight, favorable utility policies, or state incentives.
Arizona
Home to millions living in America’s sunniest cities, opportunities are everywhere to install solar panels in Arizona, with over 12% of the state’s electricity generated from sunlight. Although Arizona’s net metering laws have changed, Arizonans may qualify for both a federal tax credit (valued at 30% of the system price) as well as a state income tax credit (of up to $1,000) to reduce the cost of a solar energy system.
Florida
It’s no secret the Sunshine State is a great place to use solar power. Over the last few years, solar panel installations in Florida have accelerated so rapidly it’s now third in the country in solar capacity, and the average price of solar panel systems in Florida have dropped 37% in the last ten years. Solar panels and battery storage can also be a source of power during outages caused by hurricanes.
Credit: World Population Review
Hawaii
Sure, this seems like a no-brainer. Hawaii, though, has more than just the heavenly weather going for home solar. The combination of high electricity rates, tax credits, and rebates to bring the upfront cost of going solar down gives Hawaii among the shortest solar payback periods in the US. Hawaii has enough solar power online to power more than 550,000 homes, and a little more than 20% of the state’s electricity is from solar.
Maryland
Maryland extended and expanded its state net metering program in 2023 and has additional ways to cut into most owners’ solar payback period such as an SREC market and state tax credits for energy storage. Maryland is approaching 7% of the state’s total electricity being from solar with the state government having passed a plan to have 100% clean energy by 2040.
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Massachusetts
While New England may not be as sunny as Florida or Arizona, Massachusetts is one of the top states to go solar as an American homeowner. Considering that Massachusetts’ average residential electricity rates are among the highest in the country, locals can save a lot on utility energy bills by installing solar panels in Massachusetts and enrolling in net metering, claiming the state solar tax credit, and seeing if you qualify for rebates from your local utility.
Nevada
There are currently enough solar panels in Nevada to power over 1 million homes and solar accounts for almost 30% of the state’s electricity. The third sunniest state in the country, Nevada has been a solar hub for over a decade and net metering and net billing programs through NV Energy and the Valley Electric Association can help drive solar savings.
South Carolina
Many homeowners can also save money with solar panels in South Carolina. The Palmetto State has its own solar income tax credit and strong net metering policies.
Texas
Even with its oil history, the Lone Star State has become a leader in solar power since the turn of the decade. It is second in the US in solar capacity with enough solar to power more than 4.5 million homes. In a growing economy with a growing population, solar panels in Texas are booming, and homeowners may be able to save. While some utilities in Texas do not offer traditional net metering programs, most of the state's major electricity providers offer “solar buyback programs,” which can yield similar savings.
Important State Solar Incentives
Incentives to make home solar power more affordable vary from state to state and may vary by utility, county, or town. If you’re going solar, teaming up with a company that’ll walk you through all possible incentives and answer all your questions can save you money and stress.
Tax credit
In addition to the federal solar tax credit, officially known as the Residential Clean Energy Credit, some states have state income tax credits for homeowners who purchase and install solar systems.
For example, in New York, eligible new solar owners get a state tax credit of 25% of the new system’s installation cost up to a $5,000 tax reduction.
In South Carolina, the state tax credit is 25% of the cost of a new solar panel system up to $3,500 or 50% of a taxpayer’s tax liability for that year.
Net metering
Net metering credits solar owners for the extra electricity their solar system generates and adds to the electric grid. Net metering credits can be used to offset the cost of electricity the homeowner pulls from the grid when their home's electricity needs exceed what the solar system is generating.
Plans, rates, billing processes, and other details vary by state and by utility company. The N.C. Clean Energy Technology Center has compiled information, and a map as of November 2023, showing 34 states plus Washington, D.C., Puerto Rico, Guam, and the US Virgin Islands have mandatory net metering plans, and 13 states have or are going to solar generation compensation plans other than net metering.
Net billing is similar to net metering, however, the utility credits you at the price it saved by not providing you, the customer, with the electricity. This rate is often much lower than the retail rate you pay for electricity and net metering credit rates.
Solar renewable energy certificates
Virginia, Maryland, Delaware, Pennsylvania, Ohio, New Jersey, Massachusetts, and Washington, D.C. have SREC markets.
SRECs represent how much solar power a home or business produces. Utilities buy those SRECs to meet renewable energy goals. One SREC represents 1,000 kilowatt-hours, or 1 megawatt-hour, of electricity created using 100% solar power.
Storage incentives
Alongside federal tax credits for solar storage or battery installations, some states, utilities, and localities have additional rebates, incentives, or tax credits in place.
For example, Duke Energy offers incentives for combined solar and storage systems based on the size of both.
Property tax exemption
A home solar system, in the vast majority of cases, raises property value, which means it could raise your property taxes. Most states have passed property tax exemptions so new systems don’t increase property taxes.
Sales tax exemption
Some states have passed sales tax exemptions for clean energy systems and components. As of September 2024, we counted 18 states which exempt at least some solar systems from sales tax: Arizona, Colorado, Connecticut, Florida, Iowa, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Ohio, Rhode Island, Tennessee, Utah, Vermont, Washington, and Wisconsin. Five states (Alaska, Delaware, Montana, New Hampshire, and Oregon) have no state sales tax.
See if Solar Will Work for You and Your Home
Solar power works for more homes in more states and regions of the country than ever before. To know it’ll work for your home, partner with an experienced, helpful company which will work with you on high-quality solar energy solutions specifically designed for your home and your needs. With the right system, you can see savings.
If you want to get started or learn more, please speak with a Palmetto advisor or use our solar savings calculator today to discover possible savings in your state.
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Frequently Asked Questions
What is the best state for getting solar panels?
That answer might be different if you’re asking about the best state for weather, the best state for potential savings, the best state for state financial incentives, or another category. Home solar panels are in use in all 50 states.
Are solar panels worth it?
Solar panels are worth it for many homes for fiscal, energy-independence, and environmental reasons. Factors such as your current energy bill, home energy usage, roof space, eligibility for incentives, and your goals and needs all go into deciding if solar is right for you and your home.
Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.
Andrew GiermakWriter and EditorAndrew joined Palmetto in Charlotte in August 2024. He’s been a writer in journalism, then in business, going back to almost the 20th century. He’s lived in Indiana, Virginia, Pennsylvania, Virginia again, and now North Carolina for the last 12 years. He likes golf. Is he good at it? Not so much.
