2023 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 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 Farmington?
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Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to mitigate the cost of installing solar panels on your home. This category of financial incentives is designed to encourage more homeowners to convert their home partially or fully to renewable energy. Incentives can include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are handled by the Michigan government or your utility company, county or municipality. Types of solar incentives might include:
- Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when calculating property tax for your house.
- Rebates: Rebates, or cash back after a purchase, are usually applied prior to any solar tax credits being calculated. These rebates might be provided by your local utility company, by your state or by your county.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
- Net Metering: You may be able to sign a net metering contract with your Farmington utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your utility bill each month.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have heard of. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a given percentage of the cost of your solar system.
The ITC initially applied to 30% of the cost of installing a solar system, although it has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
To better understand how the ITC may apply to you, speak to your local Farmington solar panel installation expert and ask for more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can receive a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.
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 Farmington solar panel installers directly.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more are often offered at the local or state level. Incentives may be handled by your county or municipality, or by the state of Michigan. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Farmington
The expanding number of available solar incentives has contributed greatly to the increase in the adoption of solar energy nationwide over the past 15 years. You can get solar incentives from the federal government, the Michigan government or from your local utility company. If you're prepared to make the switch to solar energy, talking to your local Farmington solar panel installation expert is a great first step.
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Michigan Solar Solutions
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- Offers products from leading manufacturers
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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 Farmington, MI Solar Incentives FAQs
What if I add a solar system to a vacation home, rental property or commercial property? Do I still qualify for incentives?
While we recommend speaking with your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many apply to a second home, provided that it is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the details.
What are the best solar panel installation companies near me?
To find the right solar panel installer for you, check out our guide to Farmington's best solar panel companies.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now named the Clean Energy Credit, is scheduled to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
I want to switch my appliances out for ones that are more energy-efficient. Are there any incentives I can claim?
The new Inflation Reduction Act creates 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.
Can I receive incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are receiving, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to confirm that you are claiming the correct incentives and getting the most money you can.
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.