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
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Dearborn Heights?
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Federal Residential Renewable Energy Tax Credit
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Solar incentives help mitigate the cost of installing solar panels on your home. These financial incentives are intended to encourage more homeowners to switch to renewable energy. Different kinds of incentives, like cash back, discounts or monthly utility bill credits, might 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:
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions let you exclude the added value of your solar system when you're calculating the amount of property tax you need to pay on your home.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Rebates: Solar rebates may be offered by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
- Net Metering: Be sure to speak to your Dearborn Heights utility company about signing a net metering contract. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of the cost of your solar system.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost — for panels, equipment, labor and accessories — 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.
Speaking with your local Dearborn Heights solar panel installation expert is the best way to understand how the ITC could apply to your situation.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. At this point, the percentage will be reduced slightly each year until the end of the program in 2035. The expansion to the program 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. The best way to learn more about how the new Clean Energy Credit might apply to you is to speak with your local Dearborn Heights solar panel installation expert directly.
State & Local Solar Incentives
Not all solar incentives are federal; rebates, tax credits and more are often offered at the local or state level. Incentives may be given by the state of Michigan, or by your county or municipality. Certain incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Dearborn Heights
The variety of available solar incentives has enormously increased the adoption of solar energy nationwide over the last 15 years. You might qualify for solar incentives from your local utility company, the federal government or the Michigan government. We suggest talking to your local Dearborn Heights solar installer to learn more about these incentives and to be sure that you're getting the largest number possible for your solar panels.
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Michigan Solar Solutions
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- Offers products from leading manufacturers
- Slightly limited service offerings
- No leases or PPAs
Outstanding Local Installer
Strawberry Solar
- 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 Heights, MI Solar Incentives FAQs
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. There may be other solar incentives available for commercial properties, depending on the details. We recommend getting in touch with your local solar installer and/or tax professional to fully understand what incentives apply to your specific situation.
How can I learn if I qualify for specific solar incentives?
It's a good idea to talk to your local Dearborn Heights solar installer for a better understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those provided at the level of the Michigan government, might have other requirements.
If I installed solar panels on my house a few years ago, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Talking to the company that installed your system, or any local Dearborn Heights solar installer, can help you learn what incentives you can apply for.
When does the federal solar tax credit end?
The Clean Energy Credit (previously called the federal solar tax credit, or the 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 that I can claim?
With the passage of the new Inflation Reduction Act, there are several new financial incentives for making eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
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.