2023 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 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 September 15, 2023
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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 encourage homeowners to make the switch to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. Incentives can include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are provided by the state of South Dakota or by your utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: You can sign a net metering contract with your Watertown utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
- Tax Exemptions: Your solar panels might qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when calculating property taxes on your house.
- Rebates: Rebates, or partial refunds after a purchase, are normally applied prior to any solar tax credits being calculated. Solar rebates may be offered by your local utility company, by your county or by your state.
- Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC offers a tax credit for a specific percentage of your solar system's cost.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC originally paid out 30% of all system costs (panels, accessories, labor and equipment), although the covered amount has fluctuated over the last few years 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.
Curious how the ITC might apply to your specific situation? Contact your local Watertown solar panel installer to get more information.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. Homeowners can now qualify for a credit equal to 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. This percentage will then decrease yearly until the Clean Energy Credit expires in 2035. The program expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Watertown solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Rebates, tax credits and more can be provided at multiple levels. On top of 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. Local solar incentives might come from the South Dakota government, or from your specific county or municipality.
Next Steps for Installing Solar in Watertown
There are a number of different solar incentives: those provided by local utility companies, those provided by the federal government and those provided by the South Dakota government, to name a few. Solar energy use has grown tremendously in the last 15 years, partially thanks to these incentives. When you're prepared to switch over to solar energy, reaching out to your local Watertown solar panel installation expert is a great first step.
EcoWatch's Watertown, SD Solar Incentives FAQs
What if I am planning to add solar panels to a rental property, vacation home or commercial property? Will I still qualify for incentives?
Many solar incentives apply to a property you own that is located within the United States; most secondary residences will fall into this category. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to best understand what incentives will apply to your specific situation.
If my house already has solar panels, can I still claim incentives?
An excellent idea would be to talk to a representative from the company that installed your solar panels — or reach out to a local Watertown solar installer — to learn about which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will a solar system save me annually on my electric bill in Watertown?
When you add solar panels to your house in Watertown, you can expect to save about $769.81 per year, or about $14,626.30 over 20 years.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied may vary depending on which incentives you receive but usually yes, you can receive multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to ensure you are claiming all the incentives you are eligible for and applying them in the correct order.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of solar and wind power. You can also use both renewable energy sources and a backup source of non-renewable energy. Be sure to discuss your proposed plan with your local Watertown solar installation expert, so that you understand what you'll need and what kinds of incentives you might or might not qualify for.
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.