2024 Solar Incentives Guide for Rapid City, SD - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Rapid City.
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 Rapid City?
Renewable Energy System Exemption
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" broadly refers to financial incentives implemented by the government and by solar companies to encourage people to use renewable energy by making solar panels more affordable. You may qualify for different types of incentives, such as cash back, discounts 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 state of South Dakota and others from the federal government. Categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Net Metering: You can sign a net metering agreement with your Rapid City utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your monthly utility bill.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually be deducted from the total price before any tax credits are calculated.
- Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your home.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specified percentage of the cost of your solar system.
The ITC can be applied to the total cost of solar panel installation, including the panels themselves as well as equipment, accessories and labor. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.
Your local Rapid City solar panel installation expert can provide you with more information about the ITC and how it might apply to your situation.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). With the new provisions, solar installation projects started after January 1, 2022, and completed by the end of 2032, may be eligible for a 30% tax credit. This percentage will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Rapid City solar panel company can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more might be available at a more local level. Incentives might be given 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 Rapid City
Solar incentives might come from the federal government, the South Dakota government or your local utility company. The growing number of incentives available has contributed to a large increase in solar energy use in the last 15 years. Reaching out to your local Rapid City solar panel installer is a great first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Rapid City, SD Solar Incentives FAQs
How do I learn if I qualify for certain solar incentives?
Generally, solar incentives apply to:
- a new solar panel system
- installed on property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those run by the South Dakota government or by your county/municipality, sometimes have additional qualifications. Get in touch with your local Rapid City solar installer to find out what incentives your project will qualify for.
If I installed solar panels on my house a few years ago, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the year it was installed. Reaching out to the company that installed your solar system, or any local Rapid City solar installer, can help you understand what incentives you might want to apply for.
How much can I save annually on my electric bill if I add solar panels to my Rapid City home?
On average, homeowners in Rapid City who install solar panels save approximately $1,079.81 per year, or about $20,516.35 over 20 years after making the switch.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly called the ITC and now titled the Clean Energy Credit, is slated to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
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.