Report: Nevada the highest rate of residents using tax credits to adopt residential solar 

More than 2% of the Nevada households that filed a federal tax return last year received subsidies aimed at helping offset costs of residential renewable energy projects like solar panels.

Nevada has the highest concentration of residents taking advantage of a tax credit program designed to help offset installation costs for residential solar panels and other green energy projects, according to new data released last week by the Internal Revenue Service. 

The agency reported that roughly 2% of the Nevada households that filed a 2023 federal tax return claimed the Residential Clean Energy Credit, which was established in 2022 after President Joe Biden signed into law the Inflation Reduction Act (IRA). The credit covers up to 30% of the cost of installing residential renewable energy technologies like solar electric panels, solar water heaters, wind turbines, heat pumps, or battery storage devices. 

The Residential Clean Energy Credit was one of two IRA programs that, along with the Energy Efficient Home Improvement Credit, was utilized by more than 3.4 million households nationwide last year and resulted in more than $8 billion in cumulative consumer savings, according to the data. 

The new data evaluated more than 137 million federal tax returns nationwide, as 2023 marked the first full year the IRA was in effect. Officials say the new report offers a glimpse into the growing number of Americans taking advantage of programs aimed at incentivizing clean energy and efficiency upgrades. 

Among the 1.2 million Americans who took advantage of the Residential Clean Energy Credit, Nevada ranked 11th nationally with 26,920, or 2.01% of its filing households claiming the credit on their returns. That’s nearly $138 million in credits doled out in Nevada — an average of over $5,100 per household. 

Additionally, 17,140 Nevada households applied for the Energy Efficient Home Improvement Credit, which homeowners can apply for to cover costs of home energy audits or efficiency upgrades to home fixtures like exterior doors, windows, or skylights, or installing new retrofits like heat pumps. These households saved $14.2 million in total, or roughly $828 per household. 

Of the households that claimed the Residential Clean Energy Credit, rooftop solar installations made up the most popular use for the credit, with the average return yielding $5,084, according to the US Department of Treasury. And while the upfront cost of solar can be pricey (figures published by the hardware retail giant Home Depot shows the average price of a 5 Kilowatt solar system costs between $12,400-$16,900), those who make the switch save an average of more than $2,230 annually on their utility bills. 

While early results of the IRA have been promising, deputy Treasury Secretary Wally Adeyemo told reporters during a call last week that the Biden-Harris administration hopes to raise awareness so others can continue to take advantage of available resources. A poll published by the Associated Press in April found that nearly 40% of respondents were unsure whether the IRA tax credits would help them, and another nearly 25% said the legislation made no difference to them. 

“Our expectation is that as more American families become more familiar with these tax credits, and they look for ways to save money, they’ll continue to see this as a means to do so,” Adeyemo said. “Given what we’ve heard from some of the companies selling these products, our expectation is that this will continue.”

Meanwhile, the future of the IRA could be at stake, depending on which political party wins this November’s presidential election. 

MarketWatch reported in November that if Republican nominee and former president Donald Trump wins and the GOP controls both chambers in Congress, the party would seek to roll back some if not all remaining provisions of the Inflation Reduction Act. 

Project 2025, the 900-page far-right plan for a second Trump term, also calls for the repeal of the Inflation Reduction Act and its clean energy tax credits. 

Biden and Democrats, meanwhile, have for years touted how the IRA marked the most substantial climate legislation ever enacted in the US. With temperatures continuing to surge to historic highs amid worsening climate change, this November’s election could ultimately become the most consequential for the global climate. 

“He [Trump] intends to surrender our fight against the climate crisis,” Democratic presidential nominee Kamala Harris said during a stump speech in Las Vegas on Saturday. “I don’t need to tell Nevada, every day, because you all feel the impact of extreme heat and drought. You know the climate crisis is real, but Donald Trump — he claims it’s a hoax.”