2023 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 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 Hills?
Michigan Saves - Home Energy Loan Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" broadly refers to financial incentives designed to encourage increased use of renewable energy by making installing and using solar panels more affordable. Different kinds of incentives, like discounts, cash back or monthly utility bill credits, may be available to you. Certain incentives may be provided via the Michigan government, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you're calculating how much property tax you need to pay on your home.
- Net Metering: Don't forget to speak to your Farmington Hills utility company about signing a net metering agreement. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
- 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.)
- Rebates: Rebates, or partial refunds after a purchase, are typically applied before any solar tax credits are calculated. Solar rebates may be offered by your local utility company, by your county or by your state.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a predetermined percentage of the money you spend on solar panels for your home.
The ITC originally covered 30% of the cost of installing solar panels, and 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 labor, equipment and accessories. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
To more fully understand how the ITC could apply to you, speak to your local Farmington Hills solar panel installation expert and request more information.
In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit might apply to you is to get in touch with your local Farmington Hills solar panel installation expert.
State & Local Solar Incentives
Tax credits, rebates and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. These incentives may be handled by your county or municipality, or by the Michigan government. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Farmington Hills
Solar incentives might come from the Michigan government, the federal government or your local utility company. The variety of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. We suggest talking to your local Farmington Hills solar installer for more information about these incentives and to make sure that you're getting the most money possible for your solar system.
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
EcoWatch's Farmington Hills, MI Solar Incentives FAQs
What if I want to add a solar system to a rental property, vacation home or commercial property? Will I still qualify for incentives?
While we recommend getting in touch with your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives apply to a second home, as long as it is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the specifics.
How much will a solar system save me on my electric bill in Farmington Hills annually?
After adding solar panels to your Farmington Hills home, you can anticipate savings of about $813.30 per year, or about $15,452.67 over 20 years.
Who installs solar panel systems near me?
To find the right solar panel installer for you, check out our guide to the best solar companies in Farmington Hills.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied might vary depending on which incentives you are eligible for but typically yes, you can claim multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to be sure you are claiming all of the incentives you qualify for and applying them in the correct order.
Can I use a combination of solar and another type of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Make sure you go over your ideas with your local Farmington Hills solar installation expert. They can help you as you plan for your project and give you an understanding of various incentives that you might or might not 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.