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

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

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

The term "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making solar panels more affordable. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are provided by the federal government, while others are handled by the state of Minnesota or by your utility company, county or municipality. Categories of solar incentives include:

• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually come off the total price before tax credits are calculated.
• Net Metering: Net metering factors in after your solar panels are up and running. If you have in place a net metering agreement with your Cambridge 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 may receive a refund equivalent to a percentage of the value.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Tax Exemptions: These can come in the form of property tax exemptions, which would allow you to ignore the value of your solar system when calculating the taxes you pay on your house. They may also include exemptions on sales tax at the time of purchase.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. One of the incentives that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of your solar system's cost.

The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006 for you to claim the credit. Initially, the ITC applied to 30% of all costs (panels, accessories, labor and equipment), although this amount has fluctuated slightly 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 claim amount.

To best understand how the ITC will apply to you, speak to your local Cambridge solar panel installation expert and request more information.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. Now, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 can qualify for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit applies to you is to speak with your local Cambridge solar panel installers directly.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Like with federal incentives, these could include rebates, tax credits and more. Some incentives are ongoing, while others might only be available for a limited time. Solar incentives might be offered by the Minnesota government, or by your county or municipality.

Next Steps for Installing Solar in Cambridge

You can apply for and receive solar incentives from the federal government and the Minnesota government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. If you're ready to switch over to solar energy, talking to your local Cambridge solar panel installation expert is a great first step.