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

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

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

Solar incentives are intended to encourage homeowners to switch their home over to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Various kinds of incentives, like discounts, cash back or monthly utility bill credits, may be available to you. Some incentives may be offered by the state of Minnesota, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:

• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually come off your total price before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement with your Chanhassen utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
• 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. You could also look for 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. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of the cost of your solar system.

The ITC initially applied to 30% of the cost of solar panel installation, although that number has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum claim amount. The ITC can be applied to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

To more fully understand how the ITC may apply to you, get in touch with your local Chanhassen solar panel installer and request more information.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Homeowners can now qualify for a credit equal to 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. This percentage will then decrease on a yearly basis until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. Your local Chanhassen solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. Similar to federal incentives, these may include tax credits, rebates and more. Incentives may be offered by the state of Minnesota, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Chanhassen

Solar incentives may be offered by the federal government, the Minnesota government or your local utility company. The large number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Talking to your local Chanhassen solar panel installer is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.