2025 Solar Incentives Guide for Grosse Pointe Woods, MI - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Grosse Pointe Woods?

Source: https://www.dsireusa.org/

The term "solar incentives" refers to a 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. The incentives may include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of Michigan and some by your utility company, county or municipality. Types of solar incentives might include:

• Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Grosse Pointe Woods utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other places you might get refunded a percentage of the value.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Tax Exemptions: Your solar panels might qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when calculating property taxes on your home.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from the total price before tax credits are calculated.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on your solar system.

The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006, on a property owned by you for you to claim the credit. The ITC initially covered 30% of all system costs (panels, accessories, labor and equipment), although the amount has fluctuated over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

Contacting your local Grosse Pointe Woods solar panel installer is the best way to understand how the ITC could apply to your situation.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. At this point, the credit percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. Your local Grosse Pointe Woods solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Like with federal incentives, these might include rebates, tax credits and more. These incentives may be given out by the Michigan government, or by your county or municipality. Some are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Grosse Pointe Woods

Solar energy use nationwide has significantly increased in the last 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from the federal government, the Michigan government or your local utility company. Contact your local solar panel installation expert today to find out more information and to save as much money as possible on a solar system for your Grosse Pointe Woods home.