2023 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 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 March 14, 2023
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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/
Solar incentives are intended to encourage people to switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are offered by the state of South Dakota or by your utility company, county or municipality. Categories of solar incentives include:
- Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from the total price before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you're calculating the amount of property tax you need to pay on your home.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Net Metering: You may be able to sign a net metering contract with your Sioux Falls utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of the cost of your solar system.
The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006 on a property you own for you to claim the credit. The ITC originally paid out 30% of all system costs (panels, accessories, labor and equipment), although the total amount has fluctuated over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To know exactly how much money the ITC could save you, get in touch with your local Sioux Falls solar panel installer.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit; this amount will decrease slightly on a yearly basis until the current program ends. Starting in 2023, the program 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. To best understand how the new Clean Energy Credit will apply to you, speak with your local Sioux Falls solar installation company.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Like with federal incentives, these might include rebates, tax credits and more. Incentives might be handled by your county or municipality, or by the state of South Dakota. Some incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Sioux Falls
The expanding number of solar incentives available has helped tremendously increase the use of solar power nationwide over the past 15 years. You might qualify for solar incentives from the South Dakota government, the federal government or your local utility company. Call your local solar panel installation expert today to find out more information and to save as much money as possible on solar panels for your Sioux Falls home.
Best Technology
Tesla Energy
- Price-match guarantee
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- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Sioux Falls, SD Solar Incentives FAQs
My home already has solar panels. Are there any incentives that I qualify for?
An excellent idea would be to talk to the company that installed your solar system — or get in touch with a local Sioux Falls solar installer — to better understand which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are the highest-rated solar panel installation companies near me?
To learn about the top solar panel installation companies near you, take a look at our article on the best solar companies in Sioux Falls.
What are the environmental benefits of switching to solar energy?
You can decrease your carbon footprint by 450 pounds of CO2 annually by switching to solar panels. This adds up to around 9,000 pounds over 20 years. Solar is also a renewable energy source, meaning that switching your home over lessens the drain on our planet's resources.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly called the ITC and now called the Clean Energy Credit, is set to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I trade in my appliances for ones that can utilize solar energy, are there any benefits I can claim?
The recently passed Inflation Reduction Act introduces multiple incentives designed to 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.