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

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

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

Solar incentives are meant to help mitigate the cost of installing a solar panel system on your home. Financial incentives like these are intended to encourage more people to make the switch to renewable energy. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are handled by the state of Minnesota or by your utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
• Net Metering: Don't forget to speak with your Hugo utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: Your solar panels may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when you are calculating property taxes on your house.
• Rebates: Solar rebates can be offered by your state or county, or by your local utility company. These rebates work as cash back that is applied after you pay for solar panels and before tax credits are calculated.

Federal Solar Incentives

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

The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost — for panels, accessories, equipment and labor — although the percentage may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.

To find out exactly how much money the ITC could save you, talk to your local Hugo solar panel installation expert.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called 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 be reduced slightly each year until the program expires in 2035. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. Your local Hugo solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

There are more than just federal solar incentives; rebates, tax credits and more are often offered at the state and local level. These incentives might be handled by the Minnesota government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Hugo

There are many kinds of solar incentives: those offered by the federal government, those offered by the Minnesota government and those offered by local utility companies, to name a few. Solar energy use has grown tremendously in the last 15 years, partially due to these incentives. Speak with your local solar panel installation expert today to discover more about the various programs and to save the most money possible on solar panels for your Hugo home.