2023 Solar Incentives Guide for Birmingham, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Birmingham.
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 Birmingham?
Michigan Saves - Home Energy Loan Program
Federal Residential Renewable Energy Tax Credit
Solar incentives are intended to encourage homeowners to switch their home over to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. You may qualify for several types of incentives, such as discounts, cash back or monthly utility bill credits, 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. Types of solar incentives might include:
- Rebates: Rebates, or cash back after a purchase, are usually applied before any solar tax credits are calculated. Solar rebates can be provided by your local utility company, by your county or by your state.
- Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Birmingham utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Tax Exemptions: These may come in the form of property tax exemptions, which can let you exclude the value of your solar system when paying property tax on your house. You may also qualify for an exemption on sales tax at the time of purchase.
Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a specified percentage of the money you spend on solar panels for your home.
The ITC was originally for 30% of the total cost of solar panel installation, and has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Speaking with your local Birmingham solar panel installation expert is the best way to learn more about how the ITC may apply to your situation.
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. The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. At this point, the credit percentage will be reduced slightly each year until the program expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit might apply to you, speak with your local Birmingham solar installation expert.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Similar to federal incentives, these can include rebates, tax credits and more. These incentives — which might be given by your county or municipality, or by the state of Michigan — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Birmingham
Solar incentives can be provided by the federal government, the Michigan government or your local utility company. The variety of available incentives has contributed to a large increase in solar energy use in the last 15 years. When you're ready to make the change to solar energy, getting in touch with your local Birmingham solar panel installation expert is an excellent place to start.
Michigan Solar Solutions
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- Offers products from leading manufacturers
- Slightly limited service offerings
- No leases or PPAs
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 Birmingham, MI Solar Incentives FAQs
How can I find out if I qualify for specific solar incentives?
It's a good idea to talk to your local Birmingham solar installer to get an understanding of which incentives your project will qualify for. In most cases, solar incentives apply to new solar systems installed on property you own (in the U.S.) within a specified date range. Some incentives, like those offered by the government of Michigan, may have additional requirements.
Who installs solar panels near me?
To find the best solar panel installer in your area, check out our guide to Birmingham's top solar panel companies.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly named the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on precisely which incentives you are eligible for, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to ensure that you are claiming incentives correctly and getting the most money you can.
Can I use a combination of multiple types 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 wind and solar. You can also use both renewable energy sources and a non-renewable backup source of energy. You should discuss the details of your plan with your local Birmingham solar panel installer, so that you understand what you'll need and what types of incentives 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.