2023 Solar Incentives Guide for Indianapolis, IN - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Indianapolis?

Source: https://www.dsireusa.org/

Solar incentives are designed to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are provided by the state of Indiana or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Net Metering: Don't forget to speak to your Indianapolis utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when paying property tax on your house.
• Rebates: Solar rebates can be offered by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. An incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of the cost of your solar system.

The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006 on a property owned by you for you to claim the credit. The ITC initially covered 30% of all system installation costs (panels, equipment, accessories and labor), although the covered amount has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

To best understand how the ITC could apply to you, speak to your local Indianapolis solar panel installer and request more information.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After this, the percentage will be reduced slightly each year until the end of the program in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. Your local Indianapolis solar panel company can answer your questions and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more may be available at a more local level. Some incentives are ongoing, while others may only be available for a limited time. These incentives might be given by the Indiana government, or by your county or municipality.

Next Steps for Installing Solar in Indianapolis

You can qualify for solar incentives from the federal government and the Indiana government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. If you're ready to make the change to solar energy, talking to your local Indianapolis solar panel installation expert is a great first step.