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

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

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

The term "solar incentives" includes a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be handled by the Minnesota government, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:

• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually come off the total price before any tax credits are calculated.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your home.
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Buffalo utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.

Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of your solar system's cost.

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, equipment, labor and accessories. This credit can apply towards a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim 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 claim amount.

To best understand how the ITC will apply to your situation, call your local Buffalo solar panel installer and request more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After this, the percentage will decrease slightly each year until the program expires in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.

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

State & Local Solar Incentives

There are more than just federal solar incentives; tax credits, rebates and more are often offered at the state and local level. Incentives might be given by the state of Minnesota, or by your county or municipality. Some incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Buffalo

You can qualify for solar incentives from the Minnesota government and the federal government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Talking to your local Buffalo solar panel installation company is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.