2023 Solar Incentives Guide for Summit, MI - Tax Credits & Rebates

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Various types of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be handled by the Michigan government, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

• Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, 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 paying property tax on your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you've signed a net metering agreement with your Summit 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 locations, this credit is dollar-for-dollar, while in other areas you might get refunded a percentage of the value.
• Rebates: Solar rebates may be offered by your state or county, or by your local utility company. These rebates work as cash back that is applied after your purchase of solar panels and before tax credits are calculated.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specified percentage of the cost of your solar system.

The ITC applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Originally, the ITC covered 30% of all costs (panels, labor, accessories and equipment), although the amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.

To better understand exactly how much money the ITC could save you, get in touch with your local Summit solar panel installation expert.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit; the amount will be decreased slightly each year until the end of the current program. Beginning in 2023, it will also be easier to obtain credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit will apply to you is to speak with your local Summit solar panel installers directly.

State & Local Solar Incentives

Not all solar incentives are federal; rebates, tax credits and more are often offered at the local or state level. Incentives may be given by your county or municipality, or by the state of Michigan. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Summit

There are many types of solar incentives: those provided by local utility companies, those provided by the federal government and those provided by the Michigan government, to name a few. The use of solar energy has increased enormously in the last 15 years, partially due to these incentives. It is a good idea to talk to your local Summit solar installer for more information about these incentives and to be sure that you're getting the most money possible for your solar system.