2023 Solar Incentives Guide for Rapid Valley, SD - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Rapid Valley.
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 Rapid Valley?
Renewable Energy System Exemption
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" refers to financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. You might be eligible for various types of incentives, including cash back, discounts or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the South Dakota government and others from the federal government. Types of solar incentives might include:
- Rebates: Solar rebates can be offered by your county or state, or by your local utility company. These rebates work as cash back that is applied after you pay for a solar system and before tax credits are calculated.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you have in place a net metering agreement with your Rapid Valley utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you may get refunded a percentage of the value.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when paying property tax on your house.
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Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.
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, accessories, labor and equipment. 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 certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.
To better understand how the ITC might apply to you, reach out to your local Rapid Valley solar panel installation expert and request more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After 2032, the percentage will decrease slightly each year until the program expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Rapid Valley solar panel company can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more may be offered at the local or state level. These incentives may be handled by your county or municipality, or by the South Dakota government. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Rapid Valley
The nationwide use of solar energy has gone up significantly in the last 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from your local utility company, the federal government or the South Dakota government. Your local Rapid Valley solar panel installation company can help you learn more about which incentives you should apply for, and get you started on the path to switching to renewable energy today.
EcoWatch's Rapid Valley, SD Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
While we recommend speaking with your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives will apply to a second home, as long as it is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the specifics.
I already have solar panels. Do I qualify for any incentives?
An excellent idea would be to talk to the company that installed your system — or get in touch with a local Rapid Valley solar installer — to better understand which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar 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 Rapid Valley?
Generally, homeowners in Rapid Valley who install solar panels save around $1,076.63 per year, or around $20,456.03 over 20 years after they make the switch.
Can I use a combination of solar and another type 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. Be sure to go over your ideas with your local Rapid Valley solar installer. They can help you plan your project and educate you on 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.