2024 Solar Incentives Guide for Novi, MI - Tax Credits & Rebates

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

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

The phrase "solar incentives" generally refers to financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making solar panels more affordable. Solar incentives could include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the Michigan government and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually be deducted from the total price before any tax credits are calculated.
• Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when paying property tax on your home.
• Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Novi utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you might make back a percentage of the value.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.

Federal Solar Incentives

When thinking about solar incentives, federal incentives might be the first thing that comes to mind. 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 can be applied to solar panels installed after January 1, 2006, on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost – for panels, labor, equipment and accessories – although the percentage may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.

Your local Novi solar panel installation expert can provide more information about the ITC and how it applies to your situation.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit extends until 2035. American homeowners can now receive a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. The credit will then be decreased by a few percentage points every year until it expires. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

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

State & Local Solar Incentives

Tax credits, rebates and more can be provided at multiple levels. On top of federal solar incentives, there are often state and local ones, too. These incentives might be offered by your county or municipality, or by the Michigan government. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Novi

The variety of solar incentives available has contributed greatly to the increase in the use of solar power nationwide over the last 15 years. You may receive solar incentives from your local utility company, the federal government or the Michigan government. When you're ready to make the change to solar energy, getting in touch with your local Novi solar panel installation expert is an excellent place to start.