2023 Solar Incentives Guide for Madison, SD - 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?
Renewable Energy System Exemption
Southeastern Electric - Residential Energy Efficiency Rebate Program
Air to Air Heat Pump: $600
Refrigerator or Freezer: $100
Dishwasher: $50
Clothes Washer or Dryer: $50
Water Heater: rebates on Marathon water heaters, $500-$700
Southeastern Electric Cooperative - Electric Equipment Loan Program
Weatherization/Insulation: $3,000
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are provided by the federal government, while others are provided by the South Dakota government or by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement in place with your Madison utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you might make back a percentage of the value.
- Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the government. These differ from tax deductions.
- Tax Exemptions: Your solar panel system might qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your house.
- Rebates: Solar rebates might be provided by your state or county, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
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Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when you think about solar incentives. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend on your solar system.
The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. The ITC originally paid out 30% of all installation costs (panels, equipment, accessories and labor), although the total amount has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Your local Madison solar panel installation expert can offer more information about the ITC and how it applies to your situation.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. Under the new program, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 might qualify for a 30% tax credit. This percentage will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. Your local Madison solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these can include rebates, tax credits and more. Incentives may be provided by the state of South Dakota, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Madison
You can receive solar incentives from the South Dakota government and the federal government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. Contact your local solar panel installation expert today to discover more about the various programs and to save as much money as possible on a solar system for your Madison home.
EcoWatch's Madison, SD Solar Incentives FAQs
I already have solar panels. Do I qualify for any incentives?
Your best bet is to talk to someone from the company that installed your system — or call a local Madison solar installer — to clarify which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will solar panels save me annually on my electric bill in Madison?
Typically, homeowners in Madison who install solar panels save around $865.11 per year, or around $16,437.13 over 20 years after making the switch.
What are the top solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to the top solar companies in Madison.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
I want to switch my appliances out for ones that are more energy-efficient. Are there any benefits I can claim?
The new Inflation Reduction Act creates a number of 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.
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.