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

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

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

Solar incentives are designed to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are handled by the Michigan government or your utility company, county or municipality. Types of solar incentives might include:

• Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Sumpter utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
• Rebates: Rebates, or cash back after a purchase, are usually given before any solar tax credits are calculated. These rebates can be given by your local utility company, by your state or by your county.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.
• Tax Exemptions: These might come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when calculating the taxes you pay on your home. You may also qualify for an exemption on sales tax at the time of purchase.

Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on solar panels for your home.

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

Your local Sumpter solar panel installation expert can provide more information about the ITC and how it applies to your situation.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar systems installed between 2022 and 2032. After this, the percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, get in touch with your local Sumpter solar installers.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. As with federal incentives, these could include rebates, tax credits and more. These incentives might be provided by the Michigan government, or by your county or municipality. Some are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Sumpter

There are a variety of solar incentives: those offered by the federal government, those offered by the Michigan government and those offered by local utility companies, to name a few. Solar energy utilization has increased tremendously in the last 15 years, partially due to these incentives. Your local Sumpter solar panel installation expert can give you more information about which incentives you might qualify for, and get you on track to switch to renewable energy today.