Photovoltaic and solar thermal systems each carry a 30% federal tax credit for commercial installations. A federal tax credit is a dollar for dollar reduction on owed taxes. If you were to install a $10,000 hot water system you would realize a $3,000 decrease in owed taxes. Through 2010, businesses are able to take the Federal tax credit as a grant through the Department of The Treasury: http://www.treas.gov/recovery/1603.shtml. State specific incentives vary greatly. Kentucky : $1,000 Commercial tax credit. SRECs (see below) are available for grid-tie PV installations. Currently, TVA offers a $0.12kWh premium (addition to current kWh rate) for commercial renewable systems in areas served by TVA power distributors. TVA also includes a $1,000 initial grant. In Kentucky these electric companies include: Hickman-Fulton Counties RECC, Pennyrile RECC, Tri-County REMC, Warren RECC, and West Kentucky RECC. TVA service area also includes large portion of Tennessee and some portions of Virginia. Ohio: $3.50/watt Commercial Ohio grant for PV capped at $150,000. $30/kBTU grant for solar hot water systems capped at $150,000. $2/kWh grant for wind installations up to $200,000. SRECs are available for grid-tie PV and wind installations. Certain solar hot water projects may also qualify for SREC eligibility. SRECs A list of current incentives can be found at: http://www.dsireusa.org