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

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

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

Solar incentives are meant to encourage homeowners to switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are handled by the state of Minnesota or by your specific utility company, county or municipality. Types of solar incentives might include:

• Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. Rebates may be given by your local utility company, by your state or by your county.
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you're calculating the amount of property tax you need to pay on your house.
• Net Metering: You may be able to sign a net metering agreement with your Northfield utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your monthly utility bill.
• 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 someone says "solar incentives," you likely think of federal incentives first. One of the incentives many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of the cost of your solar system.

The ITC covers solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can apply towards solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.

Have questions about how the ITC applies to your specific situation? Reach out to your local Northfield solar panel installation expert to get more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. At this point, the credit percentage will decrease slightly each year until the end of the program in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit will apply to you, get in touch with your local Northfield solar installation company.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Northfield

Solar incentives might be provided by the Minnesota government, the federal government or your local utility company. The variety of available incentives has contributed to a large increase in solar energy use in the last 15 years. Your local Northfield solar panel installation expert can provide you with more details about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.