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

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

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

The term "solar incentives" covers a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different kinds of incentives, like cash back, discounts or monthly utility bill credits, may be available to you. Some incentives may be provided via the Minnesota government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:

• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your home.
• Rebates: A solar rebate is a partial refund after the purchase of your solar system. Rebates could be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Net Metering: Net metering factors in once your solar system is up and running. If you have in place a net metering agreement with your Orono 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 locations, this is a dollar-for-dollar credit, while in other places you might get refunded a percentage of the value.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC provides you with a tax credit for a specific percentage of your solar system's cost.

The ITC was originally for 30% of the cost of solar system installation, 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 labor, accessories and equipment. 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.

Your local Orono solar panel installer can provide more information about the ITC and how it may apply to your situation.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now referred to as the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After this, the credit percentage will be reduced slightly each year until the program expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit will apply to you, reach out to your local Orono solar installation company.

State & Local Solar Incentives

Rebates, tax credits and more can be provided at multiple levels. On top of federal solar incentives, there are often state and local ones, too. Incentives might be offered by your county or municipality, or by the state of Minnesota. Some incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Orono

Nationwide solar energy use has gone up tremendously in the last 15 years, in part thanks to the growth in the number of solar incentives. You might receive these incentives from your local utility company, the federal government or the Minnesota government. Your local Orono solar panel installation company can give you more information about which incentives you may qualify for, and get you feeling good about making the change to renewable energy today.