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

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

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

The term "solar incentives" refers to financial incentives that are in place to encourage increased use of renewable energy by making installing and using solar panels more affordable. You might qualify for several kinds of incentives, including cash back, discounts or monthly utility bill credits, 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. Types of solar incentives might include:

• Tax Exemptions: These might come in the form of property tax exemptions, which can let you exclude the value of your solar system when paying taxes on your home. They may also include exemptions on sales tax at the time of purchase.
• Rebates: Solar rebates can be offered by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Net Metering: You can sign a net metering contract with your Highland utility company that will apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your utility bill each month.

Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. 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 percentage of your solar system's cost.

The ITC can be applied 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 you own for you to claim the credit. The ITC originally paid out 30% of all system costs (panels, accessories, labor and equipment), although the amount has fluctuated over the 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 amount you can claim.

Your local Highland solar panel installer can provide you with more information about the ITC and how it applies to your situation.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit now runs until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This new credit will then see a slight annual decrease until its expiration. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit applies to you, talk to your local Highland solar installation company.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Highland

Solar incentives may come from your local utility company, the federal government or the Michigan government. The large number of available incentives has helped nationwide use of solar energy increase greatly in the last 15 years. If you're prepared to make the change to solar energy, calling your local Highland solar panel installation expert is a great first step.