Oklahoma solar incentives, tax credits and rebates

Financial resources for Oklahomans in 2024

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two-level farm home with solar panels

Most states offer additional financial incentives to help make the upfront investment of going solar more affordable for residents. Oklahoma is one of the few that doesn't.

On the bright side, you can still benefit from the 30% federal solar investment tax credit (ITC). In Oklahoma, a typical 10-kilowatt residential system costs $25,567 before any financial incentives. That price drops to $17,897 after considering the federal solar tax credit.

Key insights

The federal solar tax credit is the most significant solar incentive in Oklahoma. Tax credits offset your tax liability, so it’s only useful if you owe federal income taxes in the first place.

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Leasing solar panels is often cheaper upfront, but you won’t be eligible for the federal solar tax credit.

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Oklahoma does not have additional statewide solar panel incentives. However, a few energy efficiency programs are available that are smart to take advantage of before you make the switch.

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Residential solar incentives in Oklahoma

The federal solar investment tax credit (ITC) reduces your federal tax liability by 30% of how much it costs to install solar panels. This tax credit applies to both residential and commercial installations, and it includes the cost of the solar panels and other equipment, labor and additional features for monitoring the system.

The ITC drops to 26% in 2033 and then 22% in 2034.

For example, if you spend $10,000 installing a solar panel system, then the ITC is worth $3,000. If in the year your system becomes operational, you owe $15,000 in taxes, the ITC reduces what you owe to $12,000. You don’t get these benefits automatically, though. You have to claim your solar equipment, labor and permits on your federal taxes for the same year you started using your system on Form 5695.

Don’t get confused: the ITC is a credit, meaning it directly decreases the amount of taxes you owe. This is different from a deduction, which reduces your taxable income. Nor is it a rebate or a refund. It only offsets your tax liability; you can't take advantage of the ITC if you don’t owe taxes in the first place. However, the credit rolls over to the next tax year if you don’t use the full amount in the first year.

Energy efficiency incentives in Oklahoma

If you’re ready to go solar, the first step is to ensure that your electrical loads are as small as possible. For instance, if you have an older refrigerator or air conditioning unit, it’s smart to upgrade those before investing in solar panels. Getting your average electrical consumption down now means that you’ll need a smaller system to power your house, which will be cheaper overall.

Oklahoma Natural Gas offers rebates to eligible residents for energy-efficient water heaters and other eligible equipment. Oklahoma Municipal Power Authority offers the Demand and Energy Efficiency Program (DEEP) with rebates for residents who install geothermal heat pumps. Other oil and gas companies offer similar rebate programs in cities around Oklahoma:

  • AEP rebates: This AEP Public Service Co. of Oklahoma program offers money back for upgrading eligible appliances using geothermal heat pumps and other efficient technologies. For instance, a new ENERGY STAR-certified swimming pool pump would be eligible for a rebate of $400. Multiple upgrades (three or more) payout larger bonus incentives.
  • WISE rebates: The Oklahoma Municipal Power Authority (OMPA) offers residential and commercial customers rebates on a variety of HVAC equipment through the Ways I Save Electricity (WISE) rebate program. The program covers geothermal heat pumps, electric water heaters and heat pump water heaters using efficiency technologies. The rebate offers various payouts based on the type of equipment. For example, residential heat pump rebates range from $175 to $300.

More solar incentives in Oklahoma

Check the DSIRE for the most comprehensive source of information about solar incentives and policies in Oklahoma.

What to know about net metering in Oklahoma

Net metering is when you sell excess energy to your local electricity company instead of storing it in solar batteries. In Oklahoma, electric companies compensate you with credits toward your next electricity bill. Solar customers are paid for up to 125% of their consumption level. Excess energy after that point will be credited at negotiated rates that depend on the electric entity and rules in your area.

This lets you offset your electricity bills over time. For example, Lowell in Oklahoma City told us they overproduced about 600 kilowatts (kW) over the first few months of 2023. They produced less in May because it was cloudy. “But I have all this credit, so it'll be carried over into this month,” Lowell said. “So, I still won't have a bill.”

Solar panels are designed to last 25-30 years.

It’s worth noting, however, that Oklahoma utility companies don’t have to buy back excess energy at the retail rate. Instead, they often use an avoided-cost rate, which is similar to the wholesale value of electricity.

The major gas and electric entities in Oklahoma each have their own rules for customers in their service area. Oklahoma Gas & Electric, the major utility servicing the Oklahoma City metro area, offers solar customers a SmartHours Fixed (time-of-use) rate, a lower rate during off-peak hours in the summer when the sun isn’t shining.

PSO customers in the Tulsa area must submit an interconnection service application before installation. Once you’re approved, you can install your solar system; after a successful inspection, a signed agreement with PSO will govern your new distributed generation relationship. Oklahoma Electric Cooperative and Northeast Oklahoma Electric Cooperative net metering have slightly different rules.

» GREENEST STATES: Oklahoma ranked 28th in 2024

How much are solar panels in Oklahoma?

Before considering the federal solar tax credit, solar panel costs in Oklahoma typically range from $8,948 to $25,567.

Average solar panel installation cost by system size in Oklahoma

Solar resources in Oklahoma

Below are some additional resources to guide you through transitioning to solar in Oklahoma.

Find solar companies in Oklahoma

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our choices for the top solar companies in Oklahoma to learn more.

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Can I get free solar panels in Oklahoma?

We are unaware of any programs for free solar panels in Oklahoma. You can lease solar equipment with little to no upfront costs, but that generally requires a monthly fee.

» FREE SOLAR PANELS: Are they really free?

How can I pay for solar panels?

Paying upfront is the most obvious way to pay for solar panels, but many don’t have that kind of money saved up. If you’re one of those people, you can finance solar panels with a solar loan. It works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest).

» SOLAR PANELS: Lease vs. buy

How much can I save with solar panels in Oklahoma?

Over 25 years, Oklahoma homeowners with solar panels avoid $65,916 in utility costs on average. Your current electric bill is the starting point for assessing the financial benefits of transitioning to solar energy. Knowing your average energy consumption helps determine the size and capacity of the solar system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself.

How do I know if my house is a good candidate for solar?

It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.

The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels. This will cost around $5,000 for a 19-panel setup.

Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.

Is my HOA allowed to restrict solar panels?

Currently, no state laws in Oklahoma prevent homeowners associations from restricting solar panels.

What has Oklahoma’s investment in solar been so far?

Total solar investments in the state equal $416 million, according to the Solar Energy Industries Association.

Bottom line

There’s no way around it: installing solar panels is expensive. The ITC can help lower the cost by thousands of dollars. Unfortunately, the state has no local solar incentive to help out homeowners even more.

The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar. Turns out, it’s worth it for many homeowners, even in Oklahoma.

Solar costs and savings: Oklahoma vs. nearby states

* For 100% usage offset; ** Over 25 years

Article sources

ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:

  1. DSIRE, "Oklahoma Programs." Accessed March 2, 2024.
  2. EnergySage, “The cost of solar panels in Oklahoma.” Accessed March 2, 2024.
  3. Solar Energy Industries Association, "Oklahoma Solar." Accessed March 2, 2024.
  4. SolarReviews, “How much do solar panels cost in Oklahoma, 2024?” Accessed March 2, 2024.
  5. Oklahoma Corporation Commission, “Net Metering in Oklahoma.” Accessed April 23, 2024.
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