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

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

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

The phrase "solar incentives" refers to financial incentives designed to encourage the adoption and use renewable energy by making solar panels more affordable. Solar incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the state of Minnesota and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when calculating property tax for your house.
• Net Metering: Make sure you talk to your Red Wing utility company about signing a net metering agreement. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from the total price before tax credits are calculated.

Federal Solar Incentives

When thinking about solar incentives, federal incentives might be the first thing that comes to mind. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a predetermined percentage of the money you spend installing solar panels.

The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as equipment, labor and accessories. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.

Curious how the ITC might apply to your specific situation? Get in touch with your local Red Wing solar panel installation expert to get more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit extends until 2035. Homeowners can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This credit will then decrease annually until its expiration. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit might apply to you is to speak with your local Red Wing solar panel installers directly.

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 as well. Some incentives are ongoing, while others are offered for only a limited time. These local incentives might come from the Minnesota government, or from your specific county or municipality.

Next Steps for Installing Solar in Red Wing

You can qualify for solar incentives from the federal government and the Minnesota government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. We suggest talking to your local Red Wing solar installation expert for more information about these incentives and to be sure that you're getting all of the money you can for your solar system.