2023 Solar Incentives Guide for South St Paul, MN - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in South St Paul?

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

The term "solar incentives" includes a wide 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. These incentives can include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the Minnesota government and some by your specific utility company, county or municipality. Categories of solar incentives include:

• Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when calculating property tax for your home.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
• Net Metering: You can sign a net metering agreement with your South St Paul utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your monthly utility bill.
• Rebates: A rebate is a partial refund after the purchase of your solar system. These may be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of the cost of your solar system.

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

Speaking with your local South St Paul solar panel installer is the best way to learn more about how the ITC may apply to your situation.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit might apply to you is to talk with your local South St Paul solar panel installers.

State & Local Solar Incentives

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

Next Steps for Installing Solar in South St Paul

The large number of solar incentives available has helped tremendously increase the use of solar power nationwide over the past 15 years. You may receive solar incentives from the Minnesota government, the federal government or your local utility company. Your local South St Paul solar panel installer can give you more information about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.