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

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

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

The term "solar incentives" broadly refers to financial incentives designed to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. These incentives could include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of Minnesota and some by your utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Exemptions: These can come in the form of property tax exemptions, which let you exclude the value of your solar system when paying taxes on your house. They may also include exemptions on sales tax at the time of purchase.
• Net Metering: You may be able to sign a net metering agreement with your Cottage Grove utility company that will apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your utility bill each month.
• Rebates: A solar rebate is a partial refund after the purchase of your solar panels. These may be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the government. These differ from tax deductions.

Federal Solar Incentives

When you think about solar incentives, you probably think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can apply towards a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.

To know exactly how much money the ITC could save you, talk to your local Cottage Grove solar panel installation expert.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After this, the credit percentage will decrease slightly each year until the end of the program in 2035. The expansion 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 easiest way to learn more about how the new Clean Energy Credit will apply to you is to reach out to your local Cottage Grove solar panel company with your questions.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. As with federal incentives, these can include rebates, tax credits and more. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives could come from the Minnesota government, or from your specific county or municipality.

Next Steps for Installing Solar in Cottage Grove

Nationwide solar energy use has gone up tremendously in the past 15 years, in part due to the growth in the number of solar incentives. You can obtain these incentives from the Minnesota government, the federal government or your local utility company. When you're ready to switch over to solar energy, reaching out to your local Cottage Grove solar panel installation expert is an excellent place to start.