2023 Solar Incentives Guide for Bloomington, MN - Tax Credits & Rebates

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Solar incentives could include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the state of Minnesota and some by your utility company, county or municipality. Types of solar incentives might include:

• Tax Exemptions: Your solar system may 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 you are calculating property taxes on your home.
• Net Metering: You can sign a net metering contract with your Bloomington utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.
• Rebates: Solar rebates can be provided by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC applies to the total cost of solar system installation, including the panels themselves as well as labor, accessories and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.

To understand exactly how much the ITC could save you, speak with your local Bloomington solar panel installer.

The ITC was both renewed and expanded by 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. Homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. The total credit will then be decreased by a few percentage points every year until the date of expiration. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. Your local Bloomington solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. As with federal incentives, these could include rebates, tax credits and more. Some incentives are ongoing, while others are offered for only a limited time. Your local incentives might come from your county or municipality, or from the Minnesota government.

Next Steps for Installing Solar in Bloomington

You can apply for solar incentives from the federal government and the Minnesota government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Your local Bloomington solar panel installation expert can help you learn more about which incentives you can apply for, and get you on track to switch to renewable energy today.