Alaska solar rebates and incentives: 2024 guide

Despite its dark winters, Alaska's high electricity prices it a great state for going solar. While there aren’t many state-level incentives, the federal solar tax credit and the state’s net metering program can still save you thousands on your solar panel system.

As an Alaska homeowner, the ITC is the most impactful way to bring down your solar costs.

Residential Clean Energy Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce your solar panel system's cost by 30%. Your entire system qualifies for this incentive, including equipment, labor, permitting, and sales tax.

When you file your federal income taxes, you can claim this incentive as a credit towards your federal tax bill. Just keep in mind that to qualify for the ITC, you need to purchase your system either with cash or a solar loan–if you lease your system, you won't be eligible. 

You also need a high enough tax bill, though you can roll over any remaining credit year-to-year until 2035 when the ITC expires. The only time you might be eligible for a direct payment for the ITC is if you're a tax-exempt entity, like a nonprofit organization. 

In addition to the great rebates and incentives above, Alaska also offers tax exemptions for solar panel systems. The solar sales tax exemption ensures that you won't have to pay a sales tax on your system, while the solar property tax exemption means you don't need to pay a higher property tax for adding solar panels to your house. 

If you connect your solar panel system to the grid, you can benefit from a solar buyback program known as net metering—arguably the best solar incentive of them all.

With net metering, your utility company works like a bank for solar power. If you make more solar power than your home can use at any given time, you can send that excess electricity back to the grid, and your utility company gives you an energy credit. When the sun isn't shining and you need to pull electricity from the grid, your utility draws against those credits. 

Depending on the weather, your energy use, and your solar setup, net metering makes it so you will owe very little, or even nothing, on your electric bill with solar panels.

Regulated electric companies in Alaska must support net metering for solar panel systems under 25 kW. There are a few nuances to keep in mind:

• Credits can be carried forward indefinitely. At the end of every monthly billing cycle, if you’ve exported more solar power to the grid than you’ve used at home, you can keep your excess credits to cover future energy use. This allows you to save all those kWh produced in the sunnier months and apply them in the winter when your panels don’t produce as much electricity.

• Carried-forward credits are worth the "non-firm power rate, ” AKA avoided cost rate. Excess generation credits are equal to what the utility avoids spending on fuel and operations to generate electricity. The exact rates you’ll receive depend on your utility company. 

Learn more about these net metering programs:

Alaska doesn't offer any state-specific battery incentives. However, all batteries above 3 kWh in size are eligible for the 30% federal tax credit. In Alaska, batteries can also boost energy independence and provide backup power during an outage.