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

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

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

The term "solar incentives" refers broadly to financial incentives designed to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. Various types of incentives, including discounts, cash back or monthly utility bill credits, might be available to you. Certain incentives may be offered by the Minnesota government, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:

• Rebates: A solar rebate is a partial refund given after you've purchased your solar system. Rebates could be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
• Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Minnetonka utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other places you might get refunded a percentage of the value.
• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the value that your solar panels add when you calculate how much property tax you need to pay on your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)

Federal Solar Incentives

When people think of solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC provides a tax credit for a specific percentage of your solar system's cost.

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

To better understand how the ITC will apply to you, contact your local Minnetonka solar panel installer and request more information.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. Homeowners can now receive a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. This new credit will then be decreased by a few percentage points every year until it expires. Beginning in 2023, it will also be easier to obtain credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit will apply to you, speak with your local Minnetonka solar installers.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Minnetonka

The expanding number of available solar incentives has enormously increased the adoption of solar energy nationwide over the last 15 years. You might qualify for solar incentives from the Minnesota government, the federal government or your local utility company. When you're prepared to make the change to solar energy, calling your local Minnetonka solar panel installation expert is an excellent place to start.