Photovoltaic and solar thermal systems each carry a separate 30% federal tax credit for residential 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. State specific incentives vary greatly. Kentucky : $500 Residential 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 residential 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/watt Residential Ohio grant for PV capped at $25,000. $30/kBtu solar hot water grant through Green Energy Ohio capped at $2,400. SRECs are available for grid-tie PV installations. SRECs A list of current incentives can be found at:http://www.dsireusa.org/