2024 Solar Incentives Guide for Brookings, SD - Tax Credits & Rebates

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

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

The phrase "solar incentives" generally refers to financial incentives put in place by solar companies and the government 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 offered by the South Dakota government or your specific utility company, county or municipality. Categories of solar incentives include:

• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Net Metering: Net metering factors in after your solar system is up and running. If you've signed a net metering agreement with your Brookings utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
• Tax Exemptions: These can come in the form of property tax exemptions, which let you ignore the value added by your solar panels when paying taxes on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. Solar rebates may be provided by your local utility company, by your county or by your state.

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Federal Solar Incentives

When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a predetermined percentage of your solar system's cost.

The ITC can be applied to solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can be claimed on a solar panel system installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.

To know exactly how much money the ITC could save you, talk to your local Brookings 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 bolsters the current credit, increasing it up to 30% for solar systems installed between 2022 and 2032. After 2032, the percentage will decrease slightly each year until the end of the program in 2035. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Brookings solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. Like with federal incentives, these may include tax credits, rebates and more. These incentives might be handled by the South Dakota government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Brookings

You can qualify for solar incentives from the federal government and the South Dakota government, as well as from your local utility company. The increased availability of solar initiatives in the past 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 Brookings home.