2025 Solar Incentives Guide for Faribault, MN - Tax Credits & Rebates

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

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

Solar incentives are designed to mitigate the cost of installing solar panels on your home. These financial incentives are in place to encourage more Americans to switch to renewable energy. Different kinds of incentives, like cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be offered by the Minnesota government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:

• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement in place with your Faribault 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 is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the government. These are different from tax deductions.
• Tax Exemptions: These could come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
• Rebates: Solar rebates can be offered by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you purchase a solar system and before tax credits are calculated.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a certain percentage of your solar system's cost.

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

Your local Faribault solar panel installation expert can provide you with more information about the ITC and how it applies to your situation.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Homeowners can now qualify for a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. The credit percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Faribault solar panel installer can answer any questions you have and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. Like with federal incentives, these might include tax credits, rebates and more. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives might come from the Minnesota government, or from your specific county or municipality.

Next Steps for Installing Solar in Faribault

The large number of solar incentives available has helped tremendously increase the use of solar power nationwide over the last 15 years. You may receive solar incentives from your local utility company, the Minnesota government or the federal government. Contact your local solar panel installation expert today to learn more and to save the most money possible on a solar system for your Faribault home.