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

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

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

The phrase "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making solar panels more affordable. Solar incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the Michigan government and some by your utility company, county or municipality. Types of solar incentives might include:

• Net Metering: Net metering factors in once your solar system is up and running. If you've signed a net metering agreement with your Texas utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates might be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
• Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the government. Tax credits differ from tax deductions.
• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions allow you to ignore the value that your solar panels add when calculating how much property tax you need to pay on your house.

Federal Solar Incentives

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

The ITC was originally for 30% of the total cost of solar system installation, and has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.

Wondering how the ITC applies to your specific situation? Reach out to your local Texas solar panel installation expert to get more information.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will be decreased slightly each year until the end of the current program. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit will apply to you, reach out to your local Texas solar installation expert.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more might also be offered at the state and local level. Certain incentives are offered for only a limited time, while others are ongoing. Your local incentives might come from the Michigan government, or from your specific county or municipality.

Next Steps for Installing Solar in Texas

You can receive solar incentives from the Michigan government and the federal government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. When you're prepared to switch over to solar energy, talking to your local Texas solar panel installation expert is an excellent place to start.