2023 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 2023 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
Solar incentives are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are offered by the state of South Dakota or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions let you exclude the value added by your solar system when you calculate how much property tax you need to pay on your home.
- Net Metering: Be sure to speak to your Rapid City utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill 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.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates might be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specific percentage of your solar system's cost.
The ITC originally covered 30% of the total cost of solar system installation, although that number has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Speaking with your local Rapid City solar panel installation expert is the best way to understand how the ITC could apply to your situation.
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 runs until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. The amount will then decrease slightly on a yearly basis until the current program ends. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit might apply to you is to reach out to your local Rapid City solar panel installation expert with your questions.
State & Local Solar Incentives
Rebates, tax credits and more might be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. These incentives — which may be given by the state of South Dakota, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Rapid City
You can receive solar incentives from the federal government and the South Dakota government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. If you're prepared to switch over to solar energy, getting in touch with your local Rapid City solar panel installation expert is a great first step.
EcoWatch's Rapid City, SD Solar Incentives FAQs
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.