Puerto Rico Solar Incentives | Tax Credits & Rebates Guide 2024

Puerto Rico Solar Incentives: Tax Credits & Rebates Guide 2024

Written by Saltanat Berdikeeva
Edited by Jamie Cesanek
Last updated 12/1/2023

Installing solar panels in Puerto Rico is a worthwhile investment.
You can lower the cost of solar panels in Puerto Rico with federal tax credits and local incentives.
The federal government awards millions to fund solar panel and battery installations in Puerto Rico.

Solar power in Puerto Rico

Hurricane Maria in 2017 severely damaged Puerto Rico’s outdated power infrastructure. It took several months for more than 3 million residents of the island to have power back on. Due to the persistent energy crisis, many Puerto Rican residents have embraced solar energy. Rooftop solar panels and solar batteries helped residents keep their lights on in Puerto Rico during Hurricanes Fiona and Ian in 2022.

In 2022, solar power comprised 5.5% of the total residential energy demand in Puerto Rico, with an installed residential solar capacity of around 225 megawatts. The Biden administration recently announced the U.S. would award up to $440 million for rooftop solar energy in Puerto Rico, which will further stimulate the growth of residential solar panel and battery installations across the island.

Installing residential solar panels in Puerto Rico offers financial savings, environmental benefits, and greater energy independence. Read on to learn more about going solar in Puerto Rico, including the estimated costs, benefits, and incentives.

Puerto Rico solar panel cost

The cost of solar panels in Puerto Rico varies based on factors like system size, types of panels, components, roof condition and orientation, and local labor and permitting costs. Accurate solar cost data for all of Puerto Rico is not easily accessible. According to the Lawrence Berkeley National Laboratory, the average price per watt for solar panels in the U.S. is $3.67, with an average system size of 8.6 kilowatts (kW) and a total price of $31,558.

Each solar system is customizable, and total installation costs will vary depending on your chosen system size. Some homes require a larger system to cover their energy usage, while others will benefit from a small solar system. Your solar installer can help you determine the right system size for your household’s needs. The following table highlights a range of prices for system sizes priced at the U.S. average price per watt of $3.67.

System size Total cost Number of
solar panels*
5 kW $18,350 13–17
7 kW $25,690 18–23
9 kW $33,030 23–30
11 kW $40,370 28–37
13 kW $47,710 33–43

*Estimated panel count is based on the average panel size ranging from 300 to 400 watts.

Understanding Puerto Rico energy costs

According to Find Energy, the residential electricity rate in Puerto Rico is currently 24 cents per kilowatt-hour (kWh) in 2023, 38.3% higher than the latest national average of 16.29 cents. The average monthly residential power bill in Puerto Rico is $103.03 per month, lower than the national average of $146.44. However, energy costs are burdensome for many residents in Puerto Rico due to a median household income of $21,967 per year on the territory, which could make turning to solar a worthwhile investment.

The best Puerto Rico solar panel incentives or rebates

Solar panels require significant upfront investment. However, incentive programs from both the federal government and Puerto Rico can make solar more affordable and appealing to homeowners. The federal Residential Clean Energy Credit helps you recoup 30% of the cost of your solar system through 2032. In addition, Puerto Rico offers net metering to offset your electricity usage. Solar owners in the territory also qualify for 100% sales and property tax exemptions on solar panels.

Program Description
Net Metering Puerto Rico’s net metering program, called net excess generation (NEG), allows solar system owners to receive credits for any surplus electricity sent back to the power grid. LUMA, Puerto Rico’s major electric utility, purchases 75% of the excess credits at $0.10 per kWh. Residential solar systems up to 25 kW qualify for NEG.
Green Energy Fund Puerto Rico’s Green Energy Fund (GEF) aims to help accelerate the transition to renewable energy sources, including solar power. It’s funded by excise (sales) taxes on motor vehicles and motorcycles. The GEF provides rebates for projects up to 100 kW, including residential solar systems, covering up to 40% of eligible costs.
Solar Equipment Sales and Property Tax Exemptions Solar system owners in Puerto Rico can be fully exempt from sales and property taxes on their solar panel purchases.
Residential Clean Energy Credit The federal government provides a solar tax credit to help you save on your solar system purchase. From 2022 to 2032, the tax credit is 30%. It decreases to 26% in 2033 and 22% in 2034. Unless renewed by Congress, it will expire in 2035.

Why choose Puerto Rico solar power?

There are several advantages to going solar in Puerto Rico, including reduced energy costs, increased energy independence, and a smaller carbon footprint for your home.

Lower energy costs

Installing solar panels on your property can help you save on your power bills by eliminating the need to pay for electricity from the traditional energy grid. The amount you save depends on your current energy costs and the power produced by solar panels.

Increase energy independence

Increasing energy independence means you no longer rely on the traditional electricity grid to supply your home with power. Solar energy can also be stored and used with solar batteries during evenings and power outages. You can become more resistant to price increases during periods of high grid demand by going solar.

Go green

Burning fossil fuels to generate electricity causes pollution and contributes to climate change by emitting greenhouse gas emissions. As a renewable energy source, solar power doesn’t discharge carbon emissions during generation. Going solar can help you reduce your home’s carbon footprint.

Should I buy or lease my solar panels?

There are several ways to go solar: purchasing or financing solar panels, entering a power purchase agreement (PPA) or lease, or subscribing to a community solar program. Purchasing panels can maximize savings over the long term.

Joining a community solar program is an alternative for those with financial or property limitations. It’s the most optimal choice for renters. Community solar allows participants to share solar power from a nearby facility without the upfront investment of a solar array installation. If you don’t have a community solar program near you, portable solar panels are also a cost-effective option.

Payment Method Benefits Drawbacks
Cash purchase Full ownership of panels, long-term electricity savings, eligible for incentives, can boost a home’s resale value High upfront costs, expensive to relocate panels to a new home if you move soon after
Solar loan Full ownership of panels, eligible for incentives, long-term electricity savings Interest payments
Solar lease Electricity bill savings, no upfront costs or maintenance costs Fixed monthly payment to a solar leasing company for up to 25 years, no ownership, ineligible for incentives, annual price escalator
Power purchase agreement (PPA) Electricity bill savings, no upfront costs or maintenance costs Payments to a solar developer for up to 25 years, no ownership, ineligible for incentives, annual price escalator
Community solar Easy to sign up, no extra upfront costs, power home with green energy, lower energy bills No ownership of panels, ineligible for incentives

Puerto Rico solar panel companies

Green energy generation, particularly solar power, is critical to Puerto Rico’s goal to reach 40% renewable energy by 2025 and 100% by 2050. In November 2023, the U.S. Department of Energy selected Sunnova, Generac, and Sunrun to install residential rooftop solar in Puerto Rico. Prominent local solar companies in Puerto Rico include Maximo Solar and ISO Solar.

Solar Installer Year founded Financing options Warranty terms
2007 Cash purchase, solar loan, or lease 10-year quality warranty; customers who lease their systems receive coverage on maintenance and monitoring
2012 Cash purchase, solar loan, or lease 25-year manufacturer warranty and 10-year quality of work warranty and monitoring
Maximo Solar 2009 Cash purchase, solar loan 5–10-year labor warranty and 10–25-year performance warranty

What to look for in a solar contractor

A professional solar contractor installs solar panels, assists with permits, maintenance, and ensures permission to operate (PTO). To make an informed decision about installers, compare each company’s reviews, years of experience, warranties, prices, and certifications like the North American Board of Certified Energy Practitioners (NABCEP). Recommendations from friends or family who have solar can also be helpful. Choose an installer with high-quality products and strong warranties.

Beware of free solar panels in Puerto Rico scam

Solar incentives and tax credits can help you reduce solar costs. However, there are no free solar panels. If someone contacts you claiming to offer free installation, it could be a scam to get your personal information or deceive you into a solar loan. Don’t share your personal information, and avoid agreeing to any deal without detailed research and reading the fine print.

Solar power FAQs