2025 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 term "solar incentives" generally refers to financial incentives designed to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are provided by the Minnesota government or by your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Net Metering: Net metering factors in once your solar system is up and running. If you've signed a net metering agreement with your Red Wing utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from your total price before any tax credits are calculated.
• Tax Exemptions: Tax exemptions may come in one of two forms. The first 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 ignore the added value of your solar system when paying property tax on your home.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of the cost of your solar system.

The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as equipment, accessories and labor. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own and that 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.

To know exactly how much money the ITC could save you, get in touch with your local Red Wing solar panel installation expert.

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 runs until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; this amount will then decrease slightly each year until the end of the current program. The expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

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

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more may be available at a more local level. Some incentives are ongoing, while others are offered for only a limited time. Local solar incentives could come from your county or municipality, or from the Minnesota government.

Next Steps for Installing Solar in Red Wing

Solar incentives may come from your local utility company, the Minnesota government or the federal government. The variety of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Talking to your local Red Wing solar panel installation expert is an excellent first step towards getting the most money possible when you switch to solar energy.