2024 Solar Incentives Guide for Farmington, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Farmington.
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 Farmington?
Michigan Saves - Home Energy Loan Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are meant to help mitigate the cost of installing solar panels on your home. Financial incentives like these are intended to encourage more people to convert their home partially or fully to renewable energy. Solar incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the state of Michigan and some by your 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.)
- Net Metering: Net metering factors in once your solar system is up and running. If you've signed a net metering agreement with your Farmington utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
- Rebates: A rebate is a partial refund after the purchase of your solar panels. These might be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions allow you to exclude the value that your solar panels add when you're calculating the amount of property tax you need to pay.
Solar Veteran
Michigan Solar Solutions
- Great warranty coverage
- Outstanding customer service
- 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
Outstanding Local Installer
The Green Panel
- Outstanding customer service
- Excellent reputation
- Great warranty coverage
- No leases or PPAs
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of the cost of your solar system.
The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006, for you to claim the credit. Initially, the ITC applied to 30% of all costs (panels, equipment, accessories and labor), although the covered amount has fluctuated over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Your local Farmington solar panel installation expert can give you more information about the ITC and how it might 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 installations undertaken between January 1, 2022, and December 31, 2032. At this point, the percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, the 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 Farmington solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Not all solar incentives are federal; rebates, tax credits and more might also be offered at the state and local level. These incentives — which may be provided by the state of Michigan, or by your county or municipality — could be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Farmington
You can apply for solar incentives from the federal government and the Michigan government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Speaking with your local Farmington solar panel installation company is the right first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Farmington, MI Solar Incentives FAQs
How do I know if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Farmington solar installer to get an understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those offered by the government of Michigan, might have additional requirements.
If my house already has solar panels, can I still claim incentives?
You should plan to talk to someone from the company that installed your solar panels – or call a local Farmington solar installer — to learn about which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
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 reduce the strain on our planet's resources. A solar system can also reduce your home's CO2 emissions by 500 pounds a year, or around 10,000 pounds over 20 years.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I use solar and another type of renewable energy in combination to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Be sure to go over your plan with your local Farmington solar installer. They can help you plan your project and educate you on the various incentives that you will or won't qualify for.
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.