2023 Solar Incentives Guide for Handy, MI - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Handy?

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

Solar incentives are designed to encourage homeowners to switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. You may qualify for several types of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Michigan and others from the federal government. Categories of solar incentives include:

• Net Metering: Net metering becomes relevant once your solar system is up and running. If you've signed a net metering agreement with your Handy utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
• Tax Exemptions: Your solar panels might qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your home.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates 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 calculating tax credits.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of your solar system's cost.

The ITC covers solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

To understand exactly how much money the ITC could save you, talk to your local Handy solar panel installer.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Handy solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more can be offered at a more local level. Incentives may be given 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 Handy

The expanding number of available solar incentives has helped tremendously increase the adoption of solar energy nationwide over the past 15 years. You may receive solar incentives from your local utility company, the federal government or the Michigan government. Your local Handy solar panel installer can help you learn more about which incentives you can apply for, and get you on track to switch to renewable energy today.