2024 Solar Incentives Guide for Madison, MS - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Madison.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Madison?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives mitigate the cost of installing solar panels on your home. This category of financial incentives is designed to encourage more Americans to switch to renewable energy. The incentives might include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the state of Mississippi and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. These differ from tax deductions.
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions let you exclude the added value of your solar system when you're calculating the amount of property tax you need to pay on your home.
- Net Metering: Make sure you talk with your Madison utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
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Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of the cost of your solar system.
The ITC originally covered 30% of the cost of installing a solar system, although it has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum claim amount. The ITC applies to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.
To understand exactly how much the ITC could save you, speak with your local Madison solar panel installation expert.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. Now, solar installation projects that are completed between 2022 and 2032, might qualify for a 30% tax credit. This credit amount will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. The easiest way to understand how the new Clean Energy Credit applies to you is to speak with your local Madison solar panel company directly.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. As with federal incentives, these may include tax credits, rebates and more. These incentives may be distributed by your county or municipality, or by the Mississippi government. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Madison
Solar incentives might be provided by the federal government, the Mississippi government or your local utility company. The large number of available incentives has contributed to a large increase in solar energy use in the last 15 years. We recommend talking to your local Madison solar installer to learn more about these incentives and to ensure that you're getting the most money possible for your solar system.
EcoWatch's Madison, MS Solar Incentives FAQs
How much will a solar system save me annually on my electric bill in Madison?
On average, Madison homeowners who install solar panels save about $823.02 per year, or around $15,637.33 over 20 years after they make the switch.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any incentives I can claim?
The recently passed Inflation Reduction Act includes provisions for multiple incentives designed to reward homeowners for making eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of your solar panels. Depending on which incentives you are eligible for, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to ensure that you are claiming incentives correctly and that you're getting the most money possible.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home — for example, a combination of geothermal and solar. You can also use both renewable energy sources and a non-renewable backup source of energy. Make sure that you discuss your proposed plan with your local Madison solar installation expert, to make sure you know what you'll need and what incentives you may or may not qualify for.
Can I get any financial incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives apply to a property you own that is located within the United States; most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend speaking with your local solar installer and/or tax professional to fully understand what incentives may apply to your specific situation.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.