2024 Solar Incentives Guide for Sioux Falls, SD - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Sioux Falls.
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 Sioux Falls?
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/
The term "solar incentives" includes a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are provided by the South Dakota government or your utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: Be sure to speak to your Sioux Falls utility company about signing a net metering agreement. This allows you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
- Rebates: Solar rebates may be offered by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions let you exclude the value that your solar panels add when you calculate how much property tax you need to pay on your house.
Best Technology
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- Customer service varies by local dealer
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC originally covered 30% of the total cost of solar panel installation, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. 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.
To find out exactly how much the ITC could save you, talk to your local Sioux Falls solar panel installer.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Now, solar installation projects started after January 1, 2022, and completed by the end of 2032, may be eligible for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.
Click here to learn more about the new Inflation Reduction Act. Your local Sioux Falls solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more can be offered at a more local level. Certain incentives are ongoing, while others are offered for only a limited time. Your local incentives may come from your county or municipality, or from the South Dakota government.
Next Steps for Installing Solar in Sioux Falls
Nationwide solar energy use has increased enormously in the past 15 years, in part due to the proliferation of solar incentives. You can obtain these incentives from the South Dakota government, the federal government or your local utility company. We recommend talking to your local Sioux Falls solar installation expert to learn more about these incentives and to make sure that you're getting the largest number possible for your solar panels.
EcoWatch's Sioux Falls, SD Solar Incentives FAQs
I already have solar panels installed. Are there any incentives that I qualify for?
If your solar panels were installed after January 1, 2022, you may qualify for the recently 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 exact installation date. Talking to the company that installed your solar system, or any local Sioux Falls solar installer, can help you understand what incentives you can apply for.
How much can I save on my electric bill annually if I add solar panels to my house in Sioux Falls?
On average, homeowners in Sioux Falls who install solar panels save about $881.42 per year, or around $16,746.92 over 20 years after making the switch.
What are the top solar panel installation companies near me?
To find the best solar panel installer in your area, check out our guide to Sioux Falls' top solar panel companies.
If I switch my appliances out for ones that use solar energy, are there any credits I can claim?
The new Inflation Reduction Act introduces several incentives that reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives 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.