2023 Solar Incentives Guide for Dearborn, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Dearborn.
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 Dearborn?
Michigan Saves - Home Energy Loan Program
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" refers to a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. These incentives may include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled 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:
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement in place with your Dearborn utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you might make back a percentage of the value.
- Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when you are calculating property taxes on your house.
- Rebates: Rebates, or cash back after a purchase, are usually applied before any solar tax credits are calculated. Solar rebates might be offered by your local utility company, by your county or by your state.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of the cost of your solar system.
The ITC was originally for 30% of the total cost of solar system installation, and has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum claim amount. The ITC can be applied to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
Your local Dearborn solar panel installation expert can provide you with more information about the ITC and how it may apply to your situation.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; the amount will be decreased slightly on a yearly basis until the end of the current program. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Dearborn solar panel company can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Like with federal incentives, these can include tax credits, rebates and more. These incentives might be handled by the Michigan government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Dearborn
You can receive 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 increase nationwide solar energy use enormously. When you're ready to switch over to solar energy, getting in touch with your local Dearborn solar panel installation expert is a great first step.
Michigan Solar Solutions
- Great warranty coverage
- Outstanding customer service
- 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 Dearborn, MI Solar Incentives FAQs
How do I know if I qualify for solar incentives?
It's best to speak with your local Dearborn solar installer to get an understanding of which incentives your project will qualify for. In most cases, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) within a specified date range. Some incentives, like those given by the state of Michigan, might have additional requirements.
I already have solar panels. Does my system qualify for any incentives?
An excellent idea would be to talk to someone from the company that installed your solar system — or reach out to a local Dearborn solar installer — to learn about which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently 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 some environmental benefits of adding solar panels to my home?
Solar energy is a renewable energy source — by switching where you get your energy, you help lessen the strain on our planet's resources. Solar panels can also reduce your home's CO2 emissions by 500 pounds yearly, or around 10,000 pounds over 20 years.
If I trade in my appliances for ones that utilize solar energy, are there incentives that I can claim?
The recently passed Inflation Reduction Act provides a number of incentives designed to reward homeowners who make eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
The order that incentives will be applied in may vary depending on which incentives you are eligible for but generally yes, you can claim multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to be sure you are claiming all of the incentives you qualify for and applying them in the correct order.
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.