2024 Solar Incentives Guide for Watertown, SD - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Watertown.
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 Watertown?
Renewable Energy System Exemption
Otter Tail Power Company - Residential and Commercial Energy Efficiency Rebate Program
Cold-Climate Heat Pump: $500 - $700
Geothermal Heat Pump: $900/ton
Heaters/Boilers/Furnaces: $500 per unit up to 20 kW, $25/kw on units 21 kW or larger
Lighting: Varies
Residential Thermal Storage Unit: $50/kW
Residential Water Heaters: up to $400
Residential Energy Efficiency Rebates (Offered by 12 Utilities)
Clothes Dryer: $25
Lighting: Varies
Dehumidifier: $25
Dishwasher: $25
Refrigerator: $25
Central A/C: $250 - $450
Room A/C: $25
Central A/C or Heat Pump Tune-Up: $30
Furnace with ECM: $150/unit
Air Handler with ECM: $150/unit
Air-Source Heat Pump: $250 - $450/unit
Geothermal Heat Pump: $200/ton
Heat Pump Water Heaters: $250/unit
Programmable Thermostat: $25
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are intended to encourage people to switch their home over to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are provided by the South Dakota government or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions allow you to ignore the added value of your solar system when calculating the amount of property tax you need to pay on your home.
- Net Metering: Don't forget to talk with your Watertown utility company about signing a net metering agreement. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: A solar rebate is a partial refund given after you've purchased your solar system. Rebates might 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.
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 gives you a credit on your taxes equal to a percentage of the cost of your solar system.
The ITC initially applied to 30% of the cost of installing solar panels, and has fluctuated slightly over the 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 labor, equipment and accessories. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
To better understand how the ITC could apply to your situation, speak to your local Watertown solar panel installation expert and request more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit might apply to you, get in touch with your local Watertown solar installers.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones as well. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives may come from the South Dakota government, or from your specific county or municipality.
Next Steps for Installing Solar in Watertown
Solar incentives may be provided by your local utility company, the federal government or the South Dakota government. The variety of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. When you're prepared to make the change to solar energy, talking to your local Watertown solar panel installation expert is a great first step.
EcoWatch's Watertown, SD Solar Incentives FAQs
How do I learn if I qualify for specific solar incentives?
It's a smart idea to get in touch with your local Watertown solar installer to get an understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those provided by the South Dakota government, may have other requirements.
What are some environmental benefits of adding solar panels to my home?
Solar energy is a renewable energy source — by switching where you get your energy, you help lessen the strain on our planet's resources. You can also reduce the CO2 emissions from your home by 450 pounds yearly, or roughly 9,000 pounds in 20 years.
I want to change out my appliances for ones that are more energy-efficient. Are there any incentives I can apply for?
The recently passed Inflation Reduction Act introduces several incentives that reward homeowners for making eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I get any financial 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 fall under this distinction. There may be other solar incentives available for commercial properties, depending on the details. We recommend speaking with your local solar installer and/or tax professional to fully understand what incentives 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.