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

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

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

Solar incentives help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is in place to encourage more Americans to convert their home partially or fully to renewable energy. Different kinds of incentives, like discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be offered by the state of Michigan, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:

• Tax Exemptions: Your solar panels might qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the added value of the solar panels when 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.)
• Net Metering: You may be able to sign a net metering contract with your Royal Oak utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your utility bill each month.
• Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from your total price before any tax credits are calculated.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. One of the incentives that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of your solar system's cost.

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. The ITC originally paid out 30% of all installation costs (panels, equipment, labor and accessories), although this amount has fluctuated slightly 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 claim amount.

Talking to your local Royal Oak solar panel installer is the best way to learn more about how the ITC may apply 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). Under the new program, solar installation projects begun after January 1, 2022, and finished by December 31, 2032, might qualify for a 30% tax credit. This percentage will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. Your local Royal Oak solar panel company can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more might be available at a more local level. Certain incentives are ongoing, while others are available for a limited time. Solar incentives might be provided by your county or municipality, or by the Michigan government.

Next Steps for Installing Solar in Royal Oak

Solar incentives may be offered by your local utility company, the Michigan government or the federal government. The growing number of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. It is a good idea to talk to your local Royal Oak solar installer to learn more about these incentives and to ensure that you're getting the largest number possible for your solar system.