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

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

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

The phrase "solar incentives" includes a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different kinds of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Certain incentives may be provided via the Minnesota government, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:

• Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. Rebates could be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have in place a net metering agreement with your Chaska 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 places, this credit is dollar-for-dollar, while in other places you might get refunded a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
• Tax Exemptions: These can come in the form of property tax exemptions, which let you ignore the value of your solar system when paying property tax on your house. They may also include exemptions on sales tax at the time of purchase.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on solar panels for your home.

The ITC can be applied to solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

Reaching out to your local Chaska solar panel installer is the best way to learn more about how the ITC applies to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit; the amount will be decreased slightly each year until the end of the current program. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit applies to you is to get in touch with your local Chaska solar panel installation expert.

State & Local Solar Incentives

Tax credits, rebates and more might be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones as well. The incentives — which may be handled by your county or municipality, or by the state of Minnesota — could be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Chaska

There are a variety of solar incentives: those given by local utility companies, those given by the Minnesota government and those given by the federal government, to name a few. Solar energy utilization has increased tremendously in the last 15 years, partially thanks to these incentives. It is a good idea to talk to your local Chaska solar installation expert for more information about these incentives and to make sure that you're getting all of the money you can for your solar panels.