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

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

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

Solar incentives are meant to encourage people to switch their home over to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. Different types of incentives, such as cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be handled by the state of Minnesota, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

• Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions let you exclude the value added by your solar system when you're calculating how much property tax you need to pay on your house.
• Net Metering: Net metering factors in after your solar system is up and running. If you have in place a net metering agreement with your Otsego utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in others you may make back a percentage of the value.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. These may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the government. Tax credits are different from tax deductions.

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a specified percentage of the cost of your solar system.

The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost — for panels, labor, equipment and accessories — although the percentage may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.

To best understand how the ITC could apply to you, speak to your local Otsego solar panel installation expert and ask for more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. This amount will decrease slightly each year until the end of the current program. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. Your local Otsego solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more might be available at a more local level. These solar incentives — which may be given by your county or municipality, or by the state of Minnesota — might be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Otsego

Solar incentives might be offered by your local utility company, the federal government or the Minnesota government. The growing number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Your local Otsego solar panel installation expert can help you learn more about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.