2023 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 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated September 15, 2023
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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/
The term "solar incentives" includes a 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. Solar incentives might include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the Mississippi government and some by your utility company, county or municipality. Types of solar incentives might include:
- Tax Exemptions: Tax exemptions may come in 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 value added by your solar system when calculating property tax for your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. Rebates may be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Net Metering: Be sure to talk to your Madison utility company about signing a net metering agreement. This allows you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You might 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 the first thing that comes to mind when thinking about solar incentives. A federal incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of your solar system's cost.
The ITC covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can be claimed on a solar panel system installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
Have questions about how the ITC applies to your specific situation? Get in touch with your local Madison solar panel installation expert to get more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. The Clean Energy Credit runs until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. The amount will be decreased slightly each year until the end of the current program. Starting in 2023, the program 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 talk with your local Madison solar panel installers.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more might also be offered at the local or state level. These solar incentives — which might be handled by your county or municipality, or by the state of Mississippi — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Madison
Solar incentives may come from the Mississippi government, the federal government or your local utility company. The growing number of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. If you're ready to make the switch to solar energy, getting in touch with your local Madison solar panel installation expert is an excellent place to start.
EcoWatch's Madison, MS Solar Incentives FAQs
Who installs solar panels near me?
To find the best solar panel installer in your area, check out our guide to the best solar companies in Madison.
When does the federal solar tax credit end?
The federal solar tax credit, formerly called the ITC and now titled the Clean Energy Credit, is scheduled to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I trade in my appliances for ones that can utilize solar energy, are there any benefits that I can claim?
The new Inflation Reduction Act creates several new financial incentives for making eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied might vary depending on which incentives you are eligible for but generally yes, you can claim multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to ensure you are claiming all the incentives you are eligible for and applying them in the correct order.
Can I use multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Make sure you talk through your ideas with your local Madison solar installer. They can help you plan your project and also help you understand the various incentives that you will or won't qualify for.
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.