2023 Solar Incentives Guide for South Lyon, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in South Lyon.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in South Lyon?
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Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are provided by the state of Michigan or your utility company, county or municipality. Categories of solar incentives include:
- Net Metering: Net metering factors in after your solar panels are up and running. If you have in place a net metering agreement with your South Lyon 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 areas, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the federal government. These differ from tax deductions.
- Rebates: Rebates, or cash back after a purchase, are typically applied prior to any solar tax credits being calculated. These rebates can be provided by your local utility company, by your county or by your state.
- Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when paying property tax on your home.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC provides you with a tax credit for a specific percentage of the cost of your solar system.
The ITC applies to the total cost of solar panel installation, including the panels themselves as well as accessories, equipment and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.
Talking to your local South Lyon solar panel installer is the best way to understand how the ITC may apply to your situation.
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. The Clean Energy Credit lasts 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 be decreased slightly on a yearly basis until the end of the current program. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit applies to you is to reach out to your local South Lyon solar panel company with your questions.
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. The incentives — which may be provided by your county or municipality, or by the state of Michigan — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in South Lyon
Nationwide solar energy use has significantly increased in the past 15 years, in part due to the increase in availability of solar incentives. You can obtain these incentives from the federal government, the Michigan government or your local utility company. Your local South Lyon solar panel installer can give you more information about which incentives you might qualify for, and get you feeling good about making the change to renewable energy today.
EcoWatch's South Lyon, MI Solar Incentives FAQs
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