2025 Solar Incentives Guide for Woodhaven, MI - Tax Credits & Rebates

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

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

Solar incentives are designed to mitigate the cost of installing solar panels on your home. This category of financial incentives is designed to encourage more Americans to make the switch to renewable energy. Various types of incentives, such as cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be offered by the Michigan government, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:

• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually come off your total price before tax credits are calculated.
• Tax Exemptions: Tax exemptions may 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. This allows you to exclude the value added by your solar system when calculating property tax for your house.
• Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement with your Woodhaven utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.

The ITC covers solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.

Wondering how the ITC applies to your specific situation? Reach out to your local Woodhaven solar panel installer 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. Homeowners can now qualify for a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. The credit percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. Starting in 2023, the 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. The best way to understand how the new Clean Energy Credit might apply to you is to talk with your local Woodhaven solar panel company.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. Like with federal incentives, these could include tax credits, rebates and more. The incentives — which may be provided by your county or municipality, or by the state of Michigan — may be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Woodhaven

The large number of available solar incentives has helped tremendously increase the nationwide adoption of solar energy over the last 15 years. You may receive solar incentives from your local utility company, the federal government or the Michigan government. Reaching out to your local Woodhaven solar panel installer is the best first step towards getting all the incentives you qualify for when you switch to solar energy.