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

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

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

Solar incentives encourage people to switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. The incentives might include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of Minnesota and some by your utility company, county or municipality. Categories of solar incentives include:

• Tax Exemptions: Tax exemptions can come in one of 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 ignore the value added by your solar system when calculating property tax for your house.
• Net Metering: You may be able to sign a net metering agreement with your New Hope utility company that will apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your utility bill each month.
• Rebates: Rebates, or cash back after a purchase, are normally applied prior to any solar tax credits being calculated. Solar rebates might be provided by your local utility company, by your state or by your county.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)

Federal Solar Incentives

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

The ITC initially applied to 30% of the cost of installing solar panels, and has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum claim amount. 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.

Reaching out to your local New Hope solar panel installer is the best way to understand how the ITC applies to you.

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. Now, solar installation projects that are completed between 2022 and 2032 might qualify for a 30% tax credit. This percentage will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. Your local New Hope solar panel installation experts can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Tax credits, rebates and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Incentives may be given by your county or municipality, or by the state of Minnesota. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in New Hope

There are a variety of solar incentives: those provided by local utility companies, those provided by the federal government and those provided by the Minnesota government, to name a few. The use of solar energy has grown enormously in the last 15 years, partially thanks to these incentives. If you're prepared to switch over to solar energy, getting in touch with your local New Hope solar panel installation expert is an excellent place to start.