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

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

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

The phrase "solar incentives" includes a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may be eligible for different types of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Minnesota government and others from the federal government. Some broad categories of solar incentives include:

• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: These may come in the form of property tax exemptions, which let you exclude the value added by your solar panels when calculating the taxes you pay on your house. They may also include exemptions on sales tax at the time of purchase.
• Rebates: Rebates, or cash back after a purchase, are typically applied prior to any solar tax credits being calculated. Solar rebates can be offered by your local utility company, by your county or by your state.
• 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 Waconia utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you might receive a refund equivalent to a percentage of the value.

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 likely the most well-known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of the cost of your solar system.

The ITC initially applied to 30% of the total cost of installing a solar system, although that number has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum amount you can claim. The ITC can be applied to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

To find out exactly how much the ITC could save you, contact your local Waconia solar panel installer.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled 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. At this point, the credit percentage will see a slight decrease annually until the end of the program in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit might apply to you is to reach out to your local Waconia solar panel installers with your questions.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Like with federal incentives, these might include tax credits, rebates and more. The incentives — which might be provided 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 Waconia

You can apply for solar incentives from the Minnesota government and the federal government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Contact your local solar panel installer today to discover more about the various programs and to save the most money possible on a solar system for your Waconia home.