2024 Solar Incentives Guide for Farmington Hills, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Farmington Hills.
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 Hills?
Michigan Saves - Home Energy Loan Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" includes a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different kinds of incentives, like cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be offered by the Michigan government, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your home.
- Rebates: Rebates, or partial refunds after a purchase, are usually applied before any solar tax credits are calculated. Rebates can be provided by your local utility company, by your county or by your state.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Net Metering: Don't forget to talk to your Farmington Hills utility company about signing a net metering contract. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of your solar system's cost.
The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, equipment and labor. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it 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 amount you can claim.
Curious how the ITC might apply to your specific situation? Get in touch with your local Farmington Hills solar panel installation expert to get more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. American homeowners can now apply for a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. The credit will then see a slight annual decrease until its expiration. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit applies to you is to speak with your local Farmington Hills solar panel installation expert directly.
State & Local Solar Incentives
Rebates, tax credits and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Certain incentives are ongoing, while others might only be available for a limited time. They may be given by your county or municipality, or by the Michigan government.
Next Steps for Installing Solar in Farmington Hills
Solar incentives can be offered by your local utility company, the Michigan government or the federal government. The large number of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Getting in touch with your local Farmington Hills solar panel installation company is a great first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Farmington Hills, MI Solar Incentives FAQs
How do I learn if I qualify for specific solar incentives?
It's a smart idea to get in touch with your local Farmington Hills solar installer to get an understanding of which incentives your project may qualify for. Usually, solar incentives apply to new solar systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those provided by the Michigan government, may have additional requirements.
If I already have solar panels, can I still claim incentives?
An excellent idea would be to talk to the company that installed your solar system – or reach out to a local Farmington Hills solar installer — to learn about which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will a solar system save me on my electric bill in Farmington Hills annually?
Once you add solar panels to your Farmington Hills home, you can expect to save approximately $813.30 per year, or approximately $15,452.67 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.
If I switch my appliances out for ones that utilize solar energy, are there any incentives that I can claim?
The new Inflation Reduction Act includes provisions for several incentives meant to reward homeowners for making eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives 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.