2024 Solar Incentives Guide for Spearfish, SD - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Spearfish?

Source: https://www.dsireusa.org/

The term "solar incentives" refers broadly to financial incentives implemented by the government and by solar companies to encourage the use of renewable energy by making solar panels more affordable. You might qualify for different types of incentives, including discounts, cash back 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:

• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
• Net Metering: Be sure to speak with your Spearfish utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: Your solar panel system may qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when calculating property taxes on your home.
• Rebates: A solar rebate is a partial refund after the purchase of your solar panels. Rebates may be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.

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Federal Solar Incentives

When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a certain percentage of the money you spend installing solar panels.

The ITC can be applied to solar systems installed after January 1, 2006, on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost – for panels, labor, accessories and equipment – although the percentage may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.

Reaching out to your local Spearfish solar panel installer is the best way to understand how the ITC may apply to you.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. Homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. The total credit will then be decreased by a few percentage points every year until the date of expiration. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit will apply to you is to reach out to your local Spearfish solar panel installers with your questions.

State & Local Solar Incentives

Not all solar incentives are federal; tax credits, rebates and more might also be offered at the state and local level. Some incentives are ongoing, while others are only available for a limited time. Solar incentives may be provided by the South Dakota government, or by your county or municipality.

Next Steps for Installing Solar in Spearfish

You can qualify for solar incentives from the federal government and the South Dakota government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. It is a good idea to talk to your local Spearfish solar installation expert to learn more about these incentives and to ensure that you're getting all the money you can for your solar system.