2025 Solar Incentives Guide for Detroit, MI - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Detroit?

Source: https://www.dsireusa.org/

Solar incentives encourage people to switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. You may be eligible for different types of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Michigan government and others from the federal government. Types of solar incentives might include:

• Tax Exemptions: These can come in the form of property tax exemptions, which can let you exclude the value of your solar system when calculating the taxes you pay on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually come off your total price before any tax credits are calculated.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Detroit 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 others you might receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

Federal solar incentives are likely to be 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 provides a credit on your taxes equal to a predetermined percentage of the cost of your solar system.

The ITC applies to the total cost of solar panel installation, including the panels themselves as well as labor, accessories and equipment. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.

To more fully understand how the ITC could apply to your situation, call your local Detroit solar panel installation expert and request more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can apply for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. Your local Detroit solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more may be available at a more local level. These incentives may be offered 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 Detroit

You can apply for and receive solar incentives from the Michigan government and the federal government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. We suggest talking to your local Detroit solar installation expert to learn more about these incentives and to ensure that you're getting the most money possible for your solar system.