Oklahoma solar incentives, tax credits and rebates

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 $8,295 to $23,700.

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.

• Oklahoma Solar Association
• PSO solar guide for homeowners
• The City of Oklahoma City solar hub
• Solarize Green Country
• Oklahoma Secretary of Energy and Environment 
• OGE Checklist for customer-owned solar success
• OKC solar panel install submittal requirements

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.

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