2023 Solar Incentives Guide for Sterling Heights, MI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Sterling Heights.
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 Sterling Heights?
Michigan Saves - Home Energy Loan Program
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to encourage people to switch to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. Various kinds of incentives, including discounts, cash back or monthly utility bill credits, might be available to you. Certain incentives may be offered by the state of Michigan, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:
- Rebates: Solar rebates can be provided by your local utility company, or by your state or county. These rebates work as cash back that is applied after your purchase of solar panels and before tax credits are calculated.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Tax Exemptions: Tax exemptions can 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, which allows you to ignore the added value of your solar system when calculating property tax for your house.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Sterling Heights utility company, it 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 others you might make back a percentage of the value.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of your solar system's cost.
The ITC can be credited towards the value of a solar system 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 costs (panels, accessories, labor and equipment), although this amount has fluctuated over the last few 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 amount you can claim.
Speaking with your local Sterling Heights solar panel installation expert is the best way to learn more about how the ITC could apply to your situation.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. Under the new program, solar installation projects that are completed between 2022 and 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. Beginning in 2023, it will also be easier to get credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. Your local Sterling Heights solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more are often offered at the state and local level. Certain incentives are offered for only a limited time, while others are ongoing. Your local solar incentives could come from your county or municipality, or from the Michigan government.
Next Steps for Installing Solar in Sterling Heights
Solar incentives may be provided by the Michigan government, the federal government or your local utility company. The variety of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Call your local solar panel installer today to discover more about the various programs and to save the most money possible on a solar system for your Sterling Heights home.
Michigan Solar Solutions
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EcoWatch's Sterling Heights, MI Solar Incentives FAQs
What if I want to add a solar system to a rental property, vacation home or commercial property? Do I still qualify for incentives?
Many solar incentives apply to a property you own that is located within the United States; most secondary residences will fall into this category. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend talking to your local solar installer and/or tax professional to best understand what incentives will apply to your specific situation.
What are some of the environmental benefits of switching to solar?
You can lower your carbon footprint by 500 pounds of CO2 annually by switching to solar panels. This adds up to roughly 10,000 pounds over 20 years. Solar is also a renewable energy source, which means that making the switch lessens the drain on our planet's resources.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now titled the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied may vary depending on which incentives you are claiming but generally yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to confirm you are claiming all possible incentives and applying them in the correct order.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home — for example, a combination of solar and wind power. You can also combine renewable energy generation with a non-renewable backup source of energy. You should discuss your proposed plan with your local Sterling Heights solar installation expert, so that you understand what you'll need and what types of incentives you may or may not qualify for.
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.