2023 Solar Incentives Guide for Austin, MN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Austin.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Austin?
Xcel Energy - Solar*Rewards Program
Medium-sized Systems 25.1-500 kW: $0.0375/kWh
Large Systems (>500kW): Determined through competitive bid
Solar Energy Sales Tax Exemption
Wind and Solar-Electric (PV) Systems Exemption
Wind: 100% exemption from real and personal property taxes
Wind Energy Sales Tax Exemption
Xcel Energy (Electric and Gas) - Residential Energy Efficiency Rebate Program
Natural Gas Furnace Existing Home: $200-$400
Natural Gas Furnace New Construction: $100-$200
Natural Gas Hot Water Boiler: $100-$400
ECM Furnace: $100
Central AC: $150-$450
Tank Water Heater: $75-$500
Tankless Water Heater: $250
Attic/Wall Insulation: 30% of project cost
Air Sealing: $150-$200
ECM Motor Furnace Fan: $125
Programmable Thermostat: $10
Heat Pumps: $175-$475
Water Heating: $100-$250
Clothes Washer: $10
Ground Source Heat Pump: $150/ton
Brainerd Public Utilities - Residential Energy Efficiency Rebate Program
Clothes Washer: $35
Electric Clothes Dryer: $35
Room/Window A/C: $35
High Efficiency Electric Water Heater: $35
Central A/C Tune-Up: $35
Central A/C: $200-$350
Mini Split/Ductless A/C: $250
ECM Replacement Motor: $100
Heat Pump Water Heater: $250
Air Source Heat Pump: $250
Geothermal Heat Pump: $100/ton
Xcel Energy - Renewable Development Fund Grants
Connexus Energy - Residential Energy Efficiency Loan Program
Home Energy Loan Program
Renewable Energy Production Incentive
1.0¢/kWh for certain hydro facilities in need of repair
Austin Utilities - Solar Rebate Program
Solar Water Heating: $15 per square foot net aperture
Austin Utilities (Gas and Electric) - Residential Conserve and Save Rebate Program
Clothes Washer: $25-$150
Room AC: $25
Bonus Recycling Rebates: up to $15
LED Lighting: 50% of bulb or fixture cost
Central AC Clean and Tune: $25
Air Source and Water Source Heat Pumps: $100 and up
Geothermal Heat Pumps: $200/ton + $150/EER above minimum efficiency requirement + $250/desuperheater
Furnace Fan Motor: $50-$125
Natural Gas Rebates
Clothes Dryers: $50
Clothes Washers: $25-$150
Water Heaters - Tank: $50-$150
Water Heaters - Instantaneous: $200-$250
Programmable Thermostats: $25-$75
Attic Insulation: $125-$350
Electronic Ignition hearth: $75
Furnace/Boiler Clean and Tune: $25
Clothes Washer: $25 - $150
High-Efficiency Toilet: $25
Rain Barrels: $10
Weather-Based Irrigation Controls: $75 WaterSense Showerhead: $25
Federal Residential Renewable Energy Tax Credit
Solar incentives encourage homeowners to switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. Incentives can include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are provided by the state of Minnesota or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- 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 paying taxes on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement in place with your Austin 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 places you may be refunded a percentage of the value.
- Rebates: Solar rebates may be provided by your local utility company, or by your state or county. These rebates work as cash back that is applied after you pay for a solar system and before tax credits are calculated.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when you think about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of your solar system's cost.
The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, equipment, labor and accessories — although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
Your local Austin solar panel installer can provide you with more information about the ITC and how it might apply to your situation.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. American homeowners are now eligible for a 30% credit for solar systems installed between 2022 and 2032. This credit will then be decreased by a few percentage points every year until the date of expiration. 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. The best way to understand how the new Clean Energy Credit will apply to you is to speak with your local Austin solar panel installers directly.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more might also be offered at the state and local level. Some incentives are offered for only a limited time, while others are ongoing. These local incentives may come from the Minnesota government, or from your specific county or municipality.
Next Steps for Installing Solar in Austin
Nationwide solar energy use has significantly increased in the past 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from the federal government, the Minnesota government or your local utility company. Call your local solar panel installation expert today to find out more information and to save the most money possible on solar panels for your Austin home.
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EcoWatch's Austin, MN Solar Incentives FAQs
What if I want to add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
Many solar incentives apply to a property you own that is located within the United States, and most secondary residences fall under this distinction. There may be other solar incentives available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to fully understand what incentives may apply to your specific situation.
How can I find out if I qualify for solar incentives?
Generally, solar incentives apply to:
- a new solar panel system
- installed on property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those given out by the Minnesota government or by your county/municipality, sometimes have additional qualifications. Get in touch with your local Austin solar installer to find out what incentives your project will qualify for.
What are the best solar panel installation companies near me?
To discover the best solar panel installation companies near you, take a look at our article on the top solar companies in Austin.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I change out my appliances for ones that can use solar energy, are there any benefits that I can claim?
The new Inflation Reduction Act provides a number of incentives that reward homeowners who make eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.