2024 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/

The phrase "solar incentives" covers a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are handled by the state of Minnesota or your utility company, county or municipality. Categories of solar incentives include:

• Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when paying property tax on your home.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Net Metering: Net metering is an incentive you can get after 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 monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in others you might receive a refund equivalent to a percentage of the value.
• Rebates: Rebates, or cash back after a purchase, are typically applied before any solar tax credits are calculated. Rebates may be given by your local utility company, by your county or by your state.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend on your solar system.

The ITC was originally for 30% of the cost of installing a solar system, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.

To understand exactly how much the ITC could save you, contact your local Minneapolis solar panel installation expert.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners can receive a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. Your local Minneapolis 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

Some solar incentives may be provided at the state and local level. As with federal incentives, these might include rebates, tax credits and more. These incentives might be given out 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 Minneapolis

The variety of available solar incentives has helped tremendously increase the adoption of solar energy nationwide over the past 15 years. You can get solar incentives from the federal government, the Minnesota government or from your local utility company. Getting in touch with your local Minneapolis solar panel installer is a great first step towards getting the most money possible when you switch to solar energy.