Solar incentives and rebates vary significantly depending on where you live. However, one of the most substantial incentives in the 30 percent federal investment tax credit (ITC). This allows homeowners to deduct 30 percent of the total cost of a solar energy system from their taxes. Everyone who invests in a solar energy system on their property is eligible for this incentive. In addition, most states offer additional tax credits, and certain utilities and municipalities also offer cash rebates or other incentives.