2023 Solar Incentives Guide for Ann Arbor, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Ann Arbor.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Ann Arbor?
Michigan Saves - Home Energy Loan Program
Federal Residential Renewable Energy Tax Credit
Solar incentives are meant to help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is designed to encourage more people to convert their home partially or fully to renewable energy. You may be eligible for different types of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Michigan government and others from the federal government. Some broad categories of solar incentives include:
- Tax Exemptions: These could come in the form of property tax exemptions, which can let you exclude the value of your solar system when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Rebates: Rebates, or partial refunds after a purchase, are typically applied prior to any solar tax credits being calculated. Solar rebates may be given by your local utility company, by your state or by your county.
- Net Metering: Make sure you talk to your Ann Arbor utility company about signing a net metering contract. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could 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.)
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. A federal incentive that most people are likely to be 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 covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. You can receive this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
To more fully understand how the ITC might apply to your situation, contact your local Ann Arbor solar panel installation expert and ask for more information.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. The percentage will then begin to decrease yearly until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. The best way to learn more about how the new Clean Energy Credit will apply to you is to talk with your local Ann Arbor solar panel installation expert.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Similar to federal incentives, these may include tax credits, rebates and more. These solar incentives — which may be provided by your county or municipality, or by the state of Michigan — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Ann Arbor
Nationwide solar energy use has gone up tremendously in the last 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from the Michigan government, the federal government or your local utility company. Reach out to your local solar panel installer today to find out more information and to save the most money possible on a solar system for your Ann Arbor home.
Michigan Solar Solutions
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- Offers products from leading manufacturers
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Outstanding Local Installer
- Outstanding customer service
- Representatives are experts on local policies
- Educational, no-pressure sales approach
- Limited warranty coverage
- No leases or PPAs
- Limited brands of solar equipment available
EcoWatch's Ann Arbor, MI Solar Incentives FAQs
How can I learn if I qualify for specific solar incentives?
Typically, solar incentives apply to:
- a new solar panel system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those run by the Michigan government or by your county/municipality, may have additional qualifications. Talk to your local Ann Arbor solar installer to learn more about what incentives your project will qualify for.
I already have solar panels installed. Does my system qualify for any incentives?
Your best bet is to talk to the company that installed your solar system — or speak to a local Ann Arbor solar installer — to clarify which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are the best solar panel installation companies near me?
To find the best solar panel installer in your area, check out our guide to Ann Arbor's top solar panel companies.
I want to change out my appliances for ones that are more energy-efficient. Are there any credits I can claim?
Under the new Inflation Reduction Act, there are a variety of new financial incentives for making eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Make sure you go over your ideas with your local Ann Arbor solar installer. They can help you with the plan for your project and also help you understand the various incentives that you might or might not qualify for.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.