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

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

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

Solar incentives are meant to encourage people to switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are offered by the Michigan government or your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Net Metering: Don't forget to speak to your Southgate utility company about signing a net metering agreement. This allows you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates may be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
• Tax Exemptions: Your solar panels may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when you are calculating property taxes on your house.

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a specified percentage of the money you spend on your solar system.

The ITC applies to solar systems installed after January 1, 2006, on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost – for panels, accessories, labor and equipment – although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.

Your local Southgate solar panel installer can offer more information about the ITC and how it applies to your situation.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar installation projects started after January 1, 2022, and completed by the end of 2032. At this point, the percentage will be reduced slightly each year until the end of the program in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.

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 talk with your local Southgate solar panel installation expert.

State & Local Solar Incentives

Tax credits, rebates and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones as well. Incentives might be handled by your county or municipality, or by the state of Michigan. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Southgate

There are many types of solar incentives: those provided by local utility companies, those given by the Michigan government and those provided by the federal government, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially thanks to these incentives. Reach out to your local solar panel installer today to find out more information and to save as much money as possible on solar panels for your Southgate home.