2024 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 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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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
Source: https://www.dsireusa.org/
Solar incentives help mitigate the cost of installing a solar panel system on your home. These financial incentives are designed to encourage more people to switch their home over to renewable energy. These incentives could include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are provided by the federal government, some by the Michigan government and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Rebates: Solar rebates may be provided by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
- Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Ann Arbor utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.
- Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your house.
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SunPower
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Michigan Solar Solutions
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Outstanding Local Installer
Strawberry Solar
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Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a specified percentage of the money you spend on solar panels for your home.
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 have to have been installed on a property you own after January 1, 2006, for you to be eligible for the credit. The ITC originally paid out 30% of all system installation costs (panels, accessories, equipment and labor), although the covered amount has fluctuated over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To find out exactly how much money the ITC could save you, speak with your local Ann Arbor solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. The percentage will then begin to decrease annually until the Clean Energy Credit ends in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, speak with your local Ann Arbor solar installation company.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Similar to federal incentives, these may include rebates, tax credits and more. Incentives might be offered by the state of Michigan, or by your county or municipality. Certain incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Ann Arbor
You can qualify for solar incentives from the federal government and the Michigan government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. Speaking with your local Ann Arbor solar panel installation company is the right first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Ann Arbor, MI Solar Incentives FAQs
How do I know if I qualify for solar incentives?
In most cases, solar incentives apply to:
- a new solar system
- installed on a property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the Michigan government or by your county/municipality, may have additional qualifications. Speak with your local Ann Arbor solar installer to discover what incentives your project will qualify for.
My home already has solar panels installed. Does my system qualify for any incentives?
You should plan to talk to a representative from the company that installed your solar panels – or call a local Ann Arbor solar installer — to learn about which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of solar panels. Depending on precisely which incentives you are receiving, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to confirm that you are claiming incentives correctly and that you're getting the most money possible.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home, such as a combination of solar and wind power. You can also combine renewable energy generation with a backup source of non-renewable energy. Be sure to discuss the details of your plan with your local Ann Arbor solar installation expert, to get an understanding of what will be needed and what kinds of incentives you might or might not qualify for.
What if I am planning to add a solar system to a rental property, vacation home or commercial property? Will I still qualify for incentives?
Many solar incentives are intended to apply to a property you own that is located within the United States; most secondary residences fall under this distinction. There may be other solar incentives available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to fully understand what incentives may apply to your specific situation.
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.