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

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

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

The phrase "solar incentives" generally refers to financial incentives designed to encourage the use of renewable energy by making solar panels more affordable. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are provided by the state of Minnesota or by your utility company, county or municipality. Types of solar incentives might include:

• Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when calculating property tax for your home.
• Rebates: Rebates, or cash back after a purchase, are typically given before any solar tax credits are calculated. These rebates can be offered by your local utility company, by your state or by your county.
• Net Metering: Don't forget to speak with your Forest Lake utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. An incentive 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 predetermined percentage of the cost of your solar system.

The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, equipment and labor. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

Talking to your local Forest Lake solar panel installer is the best way to understand how the ITC may apply to you.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; this amount will be decreased slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. The best way to learn more about how the new Clean Energy Credit might apply to you is to get in touch with your local Forest Lake solar panel installers.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more can be offered at a more local level. Incentives might be given by the state of Minnesota, or by your county or municipality. Some incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Forest Lake

Solar incentives can come from your local utility company, the federal government or the Minnesota government. The variety of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Contact your local solar panel installer today to learn more and to save the most money possible on solar panels for your Forest Lake home.