2023 Solar Incentives Guide for Southgate, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Southgate.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Southgate?
Michigan Saves - Home Energy Loan Program
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" refers to 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. The incentives might include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are provided by the federal government, some by the Michigan government and some by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Southgate utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your home.
- Rebates: Solar rebates may be provided by your state or county, or by your local utility company. These rebates are essentially partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives may be 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 that reduces your taxes by a certain percentage of the money you spend on your solar system.
The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can be claimed on a solar panel system installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.
To best understand how the ITC might apply to you, get in touch with your local Southgate solar panel installer and request more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. You can now receive a 30% credit for solar systems installed between 2022 and 2032. This new credit will then see a slight annual decrease until it expires. Starting in 2023, it will also be easier to get 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, speak with your local Southgate solar installation expert.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. As with federal incentives, these might include tax credits, rebates and more. Incentives might be provided by the state of Michigan, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Southgate
Solar incentives might come from your local utlity company, the Michigan government or the federal government. The large number of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. We recommend talking to your local Southgate solar installation company for more information about these incentives and to ensure that you're getting the most money possible for your solar system.
Michigan Solar Solutions
- Great warranty coverage
- Outstanding customer service
- Offers products from leading manufacturers
- Slightly limited service offerings
- No leases or PPAs
Outstanding Local Installer
- Outstanding customer service
- Representatives are experts on local policies
- Educational, no-pressure sales approach
- Limited warranty coverage
- No leases or PPAs
- Limited brands of solar equipment available
EcoWatch's Southgate, MI Solar Incentives FAQs
My home already has solar panels. Does my system qualify for any incentives?
You should plan to talk to a representative from the company that installed your system — or speak to a local Southgate solar installer — to learn about which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much can I save annually on my electric bill if I add solar panels to my Southgate home?
Typically, Southgate homeowners who install solar panels save around $904.07 per year, or around $17,177.37 over 20 years after they make the switch.
What are the environmental benefits of switching to solar?
Solar energy is a renewable energy source — by switching where you get your energy, you can help lessen the strain on our planet's resources. A solar system can also lower your home's CO2 emissions by 500 pounds a year, or roughly 10,000 pounds in 20 years.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly called the federal solar tax credit, or ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I change out my appliances for ones that use solar energy, are there any benefits that I can claim?
Under the new Inflation Reduction Act, there are a number of new financial incentives to encourage you to make eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.