2023 Solar Incentives Guide for Detroit, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Detroit.
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 Detroit?
Michigan Saves - Home Energy Loan Program
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to encourage homeowners to switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. Different kinds of incentives, including discounts, cash back or monthly utility bill credits, might be available to you. Some incentives may be provided via the state of Michigan, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:
- Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from the total price before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions let you exclude the value added by your solar system when calculating how much property tax you need to pay.
- Net Metering: You may be able to sign a net metering contract with your Detroit utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your utility bill each month.
- 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.)
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of the cost of your solar system.
The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, accessories, equipment and labor — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.
To more fully understand how the ITC will apply to your situation, call your local Detroit solar panel installation expert and ask for more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. Homeowners can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This new credit will then see a slight annual decrease until it expires. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. Your local Detroit solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more may be available at a more local level. Certain incentives are ongoing, while others are offered for only a limited time. Your local solar incentives might come from your county or municipality, or from the Michigan government.
Next Steps for Installing Solar in Detroit
Solar incentives can be offered by your local utlity company, the Michigan government or the federal government. The variety of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. It is a good idea to talk to your local Detroit solar installation company for more information about these incentives and to ensure that you're getting the most money possible for your solar panels.
EcoWatch's Detroit, MI Solar Incentives FAQs
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