2024 Solar Incentives Guide for Traverse City, MI - Tax Credits & Rebates

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

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

Solar incentives encourage homeowners to switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are provided by the state of Michigan or your specific utility company, county or municipality. Categories of solar incentives include:

• Tax Exemptions: Your solar panel system might qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when calculating property taxes on your home.
• Net Metering: Make sure you talk with your Traverse City utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Rebates: Solar rebates may be offered by your county or state, or by your local utility company. These rebates are essentially cash back that is applied after your purchase of a solar system and before tax credits are calculated.
• Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the government. Tax credits differ from tax deductions.

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Federal Solar Incentives

When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.

The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed after January 1, 2006, on a property owned by you for you to be eligible for the credit. Initially, the ITC applied to 30% of all costs (panels, accessories, equipment and labor), although the 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 Traverse City solar panel installation expert is the best way to understand how the ITC could apply to you.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it 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; the amount will be decreased slightly each year until the current program ends. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

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, talk to your local Traverse City solar installation company.

State & Local Solar Incentives

Tax credits, rebates and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Some incentives are offered for only a limited time, while others are ongoing. These local incentives might come from your county or municipality, or from the Michigan government.

Next Steps for Installing Solar in Traverse City

You can apply for 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 greatly increase nationwide adoption of solar energy. Contact your local solar panel installation company today to find out more information and to save as much money as possible on a solar system for your Traverse City home.