2023 Solar Incentives Guide for Vermillion, SD - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Vermillion.
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 Vermillion?
Renewable Energy System Exemption
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Various types of incentives, like discounts, cash back or monthly utility bill credits, may be available to you. Certain incentives may be handled by the South Dakota government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:
- Tax Exemptions: Tax exemptions may come in one of two forms. First, there 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 calculating property tax for your home.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your Vermillion utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.
- Rebates: A rebate is a partial refund after the purchase of your solar system. These 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 tax credits are calculated.
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of the cost of your solar system.
The ITC can be applied to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Originally, the tax credit was for 30% of the total cost — for panels, labor, accessories and equipment — although that amount may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.
Your local Vermillion solar panel installation expert can offer more information about the ITC and how it might apply to your situation.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit now runs until 2035. American homeowners can now apply for a 30% credit for solar systems installed between 2022 and 2032. The credit will then decrease annually until its expiration. 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. The easiest way to understand how the new Clean Energy Credit will apply to you is to talk with your local Vermillion solar panel company.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these might include rebates, tax credits and more. Certain incentives are offered for only a limited time, while others are ongoing. Local solar incentives may come from your county or municipality, or from the South Dakota government.
Next Steps for Installing Solar in Vermillion
You can apply for solar incentives from the South Dakota government and the federal government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. We recommend talking to your local Vermillion solar installation expert for more information about these incentives and to be sure that you're getting the largest number possible for your solar system.
EcoWatch's Vermillion, 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.