2023 Solar Incentives Guide for Canton, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Canton.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Canton?
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Federal Residential Renewable Energy Tax Credit
Solar incentives are intended to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are handled by the state of Michigan or by your utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you calculate how much property tax you need to pay on your home.
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you've signed a net metering agreement with your Canton utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
- Rebates: Solar rebates might be provided by your county or state, or by your local utility company. These rebates work as cash back that is applied after you purchase a solar system and before tax credits are calculated.
Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC allows you to claim a tax credit for a set 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, labor, accessories and equipment. You can claim this credit for solar panels installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
To better understand how the ITC will apply to you, reach out to your local Canton solar panel installer and ask for more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. Under the new program, solar installation projects started after January 1, 2022 and completed by the end of 2032 can qualify for a 30% tax credit. The amount of the credit will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit might apply to you, talk to your local Canton solar installation company.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more may be offered at the state and local level. These incentives might be provided by the Michigan government, or by your county or municipality. Some are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Canton
Solar incentives might be offered by your local utility company, the federal government or the Michigan government. The large number of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. If you're prepared to make the switch to solar energy, getting in touch with your local Canton solar panel installation expert is a great first step.
EcoWatch's Canton, MI Solar Incentives FAQs
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.