2025 Solar Incentives Guide for Bay City, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Bay City.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Bay City?
Michigan Saves - Home Energy Loan Program
Consumers Energy (Electric) - Residential Energy Efficiency Program
Washing Machine: $25 - $50
WiFi Enabled Thermostat: $50 - $100
Room Air Conditioner: $20
Dehumidifier: $20
Pool Pump: $350
Refrigetor/Freezer Recyclilng: $50
Room Air Conditioner/Dehumidifier Recycling: $15
Heating & Cooling
Split System Central AC: $50 - $500
Air Source Heat Pump: $150 - $250
Ground Source Heat Pump: $200 - $300
Ductless Mini-Split Heat Pump: $350
ECM Motor: $50
Thermostat: $10 - $100
Central AC Tune-Up: $50
Windows & Insulation
Roof Insulation: $50 - $200
Wall Insulation: $50 - $125
Crawlspace Insulation: $10 - $50
Rim Joist Insulation: $20 - $50
Window Replacement: $15/window
Patio Door Replacement: $40/door
Lighting
Varies
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Various types of incentives, including cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be handled by the state of Michigan, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. These might be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
- Net Metering: Be sure to talk with your Bay City utility company about signing a net metering agreement. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. These are different from tax deductions.
- Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when paying property tax on your home.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of the cost of your solar system.
The ITC applies towards 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. This credit can apply towards solar panels installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.
Curious how the ITC might apply to your specific situation? Reach out to your local Bay City solar panel installer to get more information.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now receive a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. This 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 credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit might apply to you, speak with your local Bay City solar installation expert.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Like with federal incentives, these might include rebates, tax credits and more. Incentives may be given by your county or municipality, or by the state of Michigan. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Bay City
There are many types of solar incentives: those provided by the federal government, those given by the Michigan government and those given by local utility companies, to name a few. Solar energy use has grown enormously in the last 15 years, thanks to these incentives. It is a good idea to talk to your local Bay City solar installation company for more information about these incentives and to make sure that you're getting the most money possible for your solar system.
EcoWatch's Bay City, MI Solar Incentives FAQs
How can I learn if I qualify for certain solar incentives?
It's best to speak with your local Bay City solar installer for a better understanding of which incentives your project may qualify for. Usually, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those provided at the level of the Michigan government, might have other requirements.
If I already have a solar system installed on my house, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the year it was installed. Talking to the company that installed your system, or any local Bay City solar installer, can help you learn what incentives you might want to apply for.
When does the federal solar tax credit end?
The federal solar tax credit, formerly called the ITC and now titled the Clean Energy Credit, is slated to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of your solar panels. Depending on precisely which incentives you are receiving, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to confirm that you are claiming incentives correctly and getting the most money possible.
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.