2025 Solar Incentives Guide for Livonia, MI - Tax Credits & Rebates

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

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. You might qualify for several types of incentives, such as cash back, discounts or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Michigan government and others from the federal government. Some broad categories of solar incentives include:

• Tax Exemptions: These could come in the form of property tax exemptions, which let you exclude the value added by your solar panels when calculating the taxes you pay on your house. They may also include exemptions on sales tax at the time of purchase.
• Rebates: Rebates, or cash back after a purchase, are typically applied prior to any solar tax credits being calculated. Solar rebates may be offered by your local utility company, by your county or by your state.
• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. Tax credits are different from tax deductions.
• Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have in place a net metering agreement with your Livonia utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. It's likely that you've 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 your solar system.

The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006, for you to claim the credit. Initially, the ITC applied to 30% of all installation costs (panels, labor, equipment and accessories), although the amount has fluctuated slightly over time 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.

To know exactly how much the ITC could save you, talk to your local Livonia solar panel installer.

In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit runs until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit. The amount will then decrease slightly on a yearly basis until the current program ends. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit might apply to you, get in touch with your local Livonia solar installers.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more might be available at a more local level. Incentives might be offered by your county or municipality, or by the state of Michigan. Certain incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Livonia

You can qualify for solar incentives from the federal government and the Michigan government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Your local Livonia solar panel installation company can give you more information about which incentives you may qualify for, and get you on track to switch to renewable energy today.