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

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

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

Solar incentives are intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Incentives could 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 provided by the Minnesota government or your utility company, county or municipality. Some broad categories of solar incentives include:

• Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your Minneapolis utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas you may receive a refund equivalent to a percentage of the value.
• Tax Exemptions: These could come in the form of property tax exemptions, which can let you exclude the value added by your solar panels when paying taxes on your house. You could also look for exemptions on sales tax at the time of purchase.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
• Rebates: Solar rebates can be provided by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after you purchase a solar system and before tax credits are calculated.

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of the cost of your solar system.

The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property you own for you to claim the credit. The ITC initially covered 30% of all installation costs (panels, labor, equipment and accessories), although the covered amount has fluctuated slightly over the years 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 Minneapolis 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 passing 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. This credit amount will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Minneapolis solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more might be available at a more local level. Incentives might be handled 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 Minneapolis

You can apply for and receive solar incentives from the federal government and the Minnesota government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. When you're ready to make the switch to solar energy, reaching out to your local Minneapolis solar panel installation expert is an excellent place to start.