2023 Solar Incentives Guide for Madison, WI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Madison.
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 Madison?
Renewable Energy Sales Tax Exemptions
Renewable Rewards Program
Business - 0-5 kW: $200 per kW
5-10 kW: $1000 + $150 per kW over 5
10-100 kW: $1750 + $125 per kW over 10
100-300 kW: $13000 + $100 per kW over 100
300-500 kW: $33000 + $85 per kW over 300
Biogas, Solar, and Wind Energy Equipment Exemption
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to encourage homeowners to switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. You might qualify for different types of incentives, including cash back, discounts or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Wisconsin and others from the federal government. Some solar incentives you might qualify for are:
- Tax Exemptions: These may come in the form of property tax exemptions, which can let you ignore the value added by your solar panels when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Madison utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other places you might be refunded a percentage of the value.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from the total price before tax credits are calculated.
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the federal government. Tax credits differ from tax deductions.
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Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when thinking about solar incentives. A federal incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specific percentage of your solar system's cost.
The ITC originally covered 30% of the total cost of installing a solar system, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
Your local Madison solar panel installer can offer more information about the ITC and how it might apply to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The new Clean Energy Credit extends until 2035. You can now apply for a 30% credit for solar systems installed between 2022 and 2032. The credit will then decrease annually until it expires. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit might apply to you is to speak with your local Madison solar panel installers directly.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones, too. These incentives — which may be provided by the state of Wisconsin, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Madison
The variety of solar incentives available has helped tremendously increase the adoption of solar energy nationwide over the last 15 years. You might qualify for solar incentives from the Wisconsin government, the federal government or your local utility company. Reach out to your local solar panel installer today to find out more information and to save the most money possible on a solar system for your Madison home.
EcoWatch's Madison, WI Solar Incentives FAQs
What if I add a solar system to a rental property, vacation home or commercial property? Will I still qualify for incentives?
Many solar incentives are intended to apply to a property you own that is located within the United States; most secondary residences will fall into this category. Other solar incentives may be 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 may apply to your specific situation.
How much can I save on my electric bill annually if I install solar panels on my Madison home?
After adding solar panels to your home in Madison, you can anticipate savings of about $1,140.28 per year, or about $21,665.41 over 20 years.
What are the environmental benefits of switching to solar energy?
You can lower your carbon footprint by 500 pounds of CO2 a year when you switch to solar panels. This adds up to around 12,000 pounds over 20 years. In addition, solar power is a renewable energy source, meaning that making the switch reduces the drain on our planet's resources.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of solar panels. Depending on precisely which incentives you are applying for, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to ensure that you are claiming incentives correctly and that you're getting the most money you can.
Can I use a combination of multiple types of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Make sure you talk through your ideas with your local Madison solar installer. They can help you as you plan for your project and also help you understand the various incentives that 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.