2024 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 2024 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
Source: https://www.dsireusa.org/
Solar incentives are intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. The incentives could include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of South Dakota and some by your specific utility company, county or municipality. Types of solar incentives might include:
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
- Rebates: Solar rebates might be provided by your local utility company, or by your state or county. These rebates work as partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
- Net Metering: Net metering is an incentive you can get 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 monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
- Tax Exemptions: These may come in the form of property tax exemptions, which let you exclude the value added by your solar panels when paying property tax on your house. You could also look for exemptions on sales tax at the time of purchase.
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Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of the cost of your solar system.
The ITC can be applied to solar panels installed after January 1, 2006, on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost – for panels, equipment, accessories and labor – although the percentage may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.
Curious how the ITC might apply to your specific situation? Get in touch with your local Vermillion solar panel installation expert to get more information.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners can receive a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit might apply to you, speak with your local Vermillion solar installation company.
State & Local Solar Incentives
Tax credits, rebates and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Some incentives are ongoing, while others are offered for only a limited time. Your local solar incentives may come from the South Dakota government, or from your specific county or municipality.
Next Steps for Installing Solar in Vermillion
There are a variety of solar incentives: those provided by local utility companies, those offered by the South Dakota government and those given by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, thanks to these incentives. Contact your local solar panel installer today to discover more about the various programs and to save as much money as possible on a solar system for your Vermillion home.
EcoWatch's Vermillion, SD Solar Incentives FAQs
How do I know if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Vermillion solar installer to get an understanding of which incentives your project will qualify for. Generally, solar incentives apply to new solar systems installed on property you own (in the U.S.) within a specified date range. Some incentives, such as those provided at the level of the South Dakota government, may have other requirements.
I already have solar panels installed. Are there any incentives that I qualify for?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Reaching out to the company that installed your system, or any local Vermillion solar installer, can help you learn more about what incentives you might want to apply for.
What are some environmental benefits of installing solar panels on my house?
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. In addition, solar power is a renewable energy source, meaning that switching your home over reduces 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 titled the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
Many solar incentives apply to a property you own that is located within the United States, and most secondary residences will fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend getting in touch with your local solar installer and/or tax professional to better understand what incentives may apply to your specific situation.
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.