Rebates and incentives

Rebate plus ITC combined calculator

Enter one rebate and your federal credit percentage. This applies the rebate to your basis first, then the credit, so the total isn't overstated.

Your numbers

1 Project details Optional
2 System and rebate
A utility or state rebate paid as a flat dollar amount, not a tax credit.
3 Federal credit
Not sure which number to use? Check the federal ITC calculator first.
Leave this on the default unless you're checking the difference for yourself.

How it works

Three steps to your combined total

Step 1

Enter your rebate amount

Use a flat dollar figure, not a percentage. If your rebate is structured as a per-watt rate, multiply it out first. Check your program's terms on the rebates and incentives hub if you're not sure of the exact number.

Step 2

Enter your federal credit percentage

Most homeowners buying or financing in 2026 should enter 0%, since Section 25D ended. Run the federal ITC calculator first if you're not certain which percentage applies to your situation.

Step 3

Compare the two basis methods

Toggle between the reduced basis and full cost method to see exactly how much the rebate-first order changes your total. The correct method for tax purposes is almost always the reduced basis.

Why the calculation order changes your total

A simple example

Take a $20,000 system with a $1,500 utility rebate and a 30% federal credit. Applying the rebate first drops the basis to $18,500, and 30% of that is $5,550, for $7,050 total. Applying the credit to the full $20,000 instead gives $6,000, plus the $1,500 rebate, for $7,500 total. That's a $450 overstatement, small on this example but larger on bigger systems or bigger rebates. Check your ZIP code's numbers on the rebates and incentives hub if you want to see this play out with your own state's rebate structure. The DSIRE database of state incentives lists the incentives that apply in your state, with links to each program's rules.

Which method is actually correct

The IRS treats most utility and state cash rebates as a subsidy that reduces your qualified expenditure before the residential credit is calculated. That means the reduced-basis method is the one that matches how the credit actually gets filed, not just a conservative estimate. Use the federal ITC step down timeline tool if you also need to confirm what percentage applies to your placed-in-service date.

When to use the full-cost comparison instead

The full-cost option in this tool exists purely so you can see the size of the gap for yourself, not because it's the correct method to file with. Some installer sales materials use the full-cost method to make combined savings look bigger than they'll actually be. Comparing both numbers side by side is a fast way to sanity-check a quote. If you will borrow for the system, the combined loan and rebate timing tool shows what the same cost looks like month by month.

Combining more than two incentives

This tool is built around exactly one rebate plus the federal credit. If you're also adding a state income tax credit, a second rebate, or ongoing SREC income, the rebate stacking tool handles that fuller picture without losing track of which incentives reduce the basis and which don't.

If you borrow for the rest of the system, the combined loan and rebate timing tool takes your rebate total and works out the monthly payment on the balance. The SREC explains the terms behind this estimate in plain language.

Questions

Frequently asked

Subtract the rebate from your system cost first, then apply the federal credit percentage to what's left. A $20,000 system with a $1,500 rebate has an $18,500 basis, and at 30% that's a $5,550 credit, for $7,050 in total incentives rather than the $6,000 you'd get by applying 30% to the full $20,000 and adding the rebate separately.

For most homeowners who buy or finance their own system, use 0%, since Section 25D ended for systems placed in service after December 31, 2025. Lease and PPA customers can enter 30% if their placed-in-service date falls before 2028, though that credit goes to the leasing company, not the homeowner directly. Check the federal ITC calculator if you're not sure which applies to you.

Yes, as long as the rebate is a direct cash payment or point-of-sale discount rather than a percentage-based tax credit. State cash rebates reduce your basis the same way a utility rebate does. If you're combining more than one rebate or a percentage-based state credit as well, use the rebate stacking tool instead, since it handles more incentive types at once.

The most common reason is that the federal credit is calculated against your reduced basis, not your full system cost. If you were expecting 30% of the sticker price plus the full rebate on top, that overstates the real total by the amount of credit lost to the reduced basis. This calculator shows both numbers side by side so you can see exactly where the difference comes from.

Related tools

Keep checking your incentives

Federal ITC calculator Federal ITC step down timeline Rebate stacking tool Utility rebate vs state rebate Rebate application cost benefit SREC value estimator California incentive estimator All rebates and incentives tools