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

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

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

The term "solar incentives" refers broadly to financial incentives that are in place to encourage the use of renewable energy by making the installation and use of solar panels more affordable. The incentives could include upfront discounts, cash back or credit towards your monthly 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. Categories of solar incentives include:

• Rebates: Rebates, or partial refunds after a purchase, are usually applied before any solar tax credits are calculated. Solar rebates may be offered by your local utility company, by your state or by your county.
• Net Metering: Don't forget to talk to your Independence utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.
• Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar system. Property tax exemptions let you exclude the value added by your solar system when you're calculating the amount of property tax you need to pay on your home.

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. One of the incentives many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of the cost of your solar system.

The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as labor, equipment and accessories. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.

Contacting your local Independence solar panel installation expert is the best way to understand how the ITC applies to your situation.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. With the new provisions, solar installation projects that are completed between 2022 and 2032 can qualify for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. The expansion also makes it easier to get credit for energy storage systems, starting in 2023.

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

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. As with federal incentives, these could include rebates, tax credits and more. These incentives may be distributed by the Minnesota government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Independence

Nationwide solar energy use has increased enormously in the past 15 years, in part thanks to the growth in the number of solar incentives. You may get these incentives from your local utility company, the federal government or the Minnesota government. Reaching out to your local Independence solar panel installation company is the best first step towards getting the most money possible when you switch to solar energy.