2023 Solar Incentives Guide for Dearborn Heights, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Dearborn Heights.
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 Dearborn Heights?
Michigan Saves - Home Energy Loan Program
Federal Residential Renewable Energy Tax Credit
Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Different kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be offered by the Michigan government, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:
- Rebates: Solar rebates might be provided by your state or county, or by your local utility company. These rebates work as partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the added value of your solar system when you're calculating the amount of property tax you need to pay on your home.
- Net Metering: You may be able to sign a net metering agreement with your Dearborn Heights utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on solar panels for your home.
The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost — for panels, accessories, equipment and labor — although that amount may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
Your local Dearborn Heights solar panel installation expert can provide more information about the ITC and how it might apply to your situation.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. With the new provisions, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. This credit amount will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. Your local Dearborn Heights solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Rebates, tax credits and more can be provided at multiple levels. On top of federal solar incentives, there are often state and local ones, too. Incentives might be given by the state of Michigan, or by your county or municipality. Some incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Dearborn Heights
You can apply for solar incentives from the federal government and the Michigan government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. We suggest talking to your local Dearborn Heights solar installer for more information about these incentives and to ensure that you're getting the most money possible for your solar system.
EcoWatch's Dearborn Heights, MI Solar Incentives FAQs
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