2025 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 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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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
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. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are handled by the state of Michigan or by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
- Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually be deducted from your total price before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions let you ignore the value added by your solar system when you calculate the amount of property tax you need to pay on your home.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Dearborn Heights utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you may be refunded a percentage of the value.
Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of the cost of your solar system.
The ITC applies towards solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. This credit can apply towards solar panels installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
Contacting your local Dearborn Heights solar panel installation expert is the best way to understand how the ITC may apply to you.
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 bolsters the current credit, increasing it up to 30% for solar systems installed between 2022 and 2032. At this point, the percentage will see a slight decrease annually until the end of the program 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. The best way to understand how the new Clean Energy Credit will apply to you is to talk with your local Dearborn Heights solar panel installers.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more might be available at a more local level. These incentives may be given out by the Michigan government, or by your county or municipality. Some are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Dearborn Heights
Solar incentives might come from the federal government, the Michigan government or your local utility company. The large number of incentives available 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, talking to your local Dearborn Heights solar panel installation expert is an excellent place to start.
EcoWatch's Dearborn Heights, MI Solar Incentives FAQs
What are some environmental benefits of installing solar panels on my house?
Solar energy is a renewable energy source — by changing where you get your energy, you help lessen the strain on our planet's resources. A solar system can also lower the CO2 emissions from your home by 500 pounds yearly, or roughly 10,000 pounds in 20 years.
When does the federal solar tax credit end?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I switch my appliances out for ones that can utilize solar energy, are there any incentives I can claim?
The new Inflation Reduction Act provides several incentives designed to reward homeowners for making eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home — for example, a combination of solar and geothermal. You can also combine renewable energy generation with a non-renewable backup source of energy. Be sure to discuss your plan with your local Dearborn Heights solar installation expert, to get an understanding of what will be needed and what types of incentives you might or might not qualify for.
Can I get any financial incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives apply to a property you own that is located within the United States, and most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend talking to your local solar installer and/or tax professional to fully understand what incentives will apply to your specific situation.
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.