By now every state in the union offers prospective solar energy users some form of tax incentive or rebate. While the country waits for the federal government to get behind solar and other green industries in a substantial way, many states have taken matters into their own hands. And behind the example of a few progressive leaders, other states are now vying for a bigger slice of the green energy pie and recognizing the seemingly inevitable domination of renewable energy resources.

The far-and-away leaders in the solar PV market have been California and New Jersey, with New England states, led by Massachusetts, pulling in as the third largest US market.

California is not only the dominant PV market in the U.S., but one of the largest in the world. As of 2006 California had the fifth largest market in the world with more than 15,000 systems installed on homes and small businesses, due mainly to the California Energy Commission’s rebate program. Many local governments are participating too. Berkeley’s ambitious plan to pay up-front for residential solar PV systems is a shining example.

New Jersey is another state leader in solar, again due mainly to progressive state funding and incentives. New Jersey provides a $5.10/watt rebate and a sales tax exemption for solar system owners. Owners of these systems also receive solar renewable energy certificates (SREC) for each megawatt-hour of solar electricity their systems produce. These certificates can be sold to utilities or middlemen on the open market. This is all part of Jersey’s renewable portfolio standard (RPS), which requires increasing amounts of energy to come from solar and other renewable sources. California and several other states also have standards which are becoming the standard in general as the clean tech industry grows.

Massachusetts, along with neighbors Connecticut and New York, holds the third largest PV market in the U.S. All three states offer substantial rebates. Massachusetts also benefits significantly from solar industry jobs. Solar and other clean tech companies have employed over 14,500 people in 2007 and that number is growing by 20% per year.

Private investment is also a major source of funding for solar energy. It is no surprise that much of the money invested went to these leading solar states. Of $3 billion invested in the global renewable energy industry, half went to California companies and 10% to Massachusetts’ ventures.

In the very young history of the solar industry, California and New Jersey have outshone other states in embracing the sun as energy. But this is a young history. Other states are jumping in. Now over half of U.S. states have renewable portfolio standards and all have incentives for individuals and businesses.

To learn more about tax incentives in your state, look here. To find out more about installing your own solar electric system, go to CalFinder Solar to get in touch with certified solar installers.