2024 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 2024 and beyond)
- Ways to optimize your solar investment
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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/
The term "solar incentives" includes a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You might be eligible for various kinds of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Wisconsin and others from the federal government. Categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
- Rebates: Rebates, or cash back after a purchase, are normally given before any solar tax credits are calculated. Solar rebates may be provided by your local utility company, by your state or by your county.
- Net Metering: Net metering factors in once your solar system is up and running. If you have in place a net metering agreement with your Madison utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other places you might make back a percentage of the value.
- Tax Exemptions: These could come in the form of property tax exemptions, which can let you exclude the value of your solar system when calculating the taxes you pay on your home. 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 to be the first thing that you think of when you think about solar incentives. 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 certain percentage of your solar system's cost.
The ITC applies to solar systems installed after January 1, 2006, on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost – for panels, equipment, accessories and labor – although that amount may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.
To more fully understand how the ITC could apply to you, contact your local Madison solar panel installer and request 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). Now, solar installation projects begun after January 1, 2022, and finished by December 31, 2032, may be eligible for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The expansion to the program 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 Madison solar panel installer can answer your questions and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. Like with federal incentives, these might include rebates, tax credits and more. These incentives might be offered by the Wisconsin government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Madison
Solar incentives might be provided by your local utility company, the Wisconsin government or the federal government. The growing number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. If you're ready to make the switch to solar energy, reaching out to your local Madison solar panel installation expert is a great first step.
EcoWatch's Madison, WI Solar Incentives FAQs
How much will a solar system save me annually on my electric bill in Madison?
Generally, homeowners in Madison who install solar panels save about $1,140.28 per year, or about $21,665.41 over 20 years after making the switch.
Who installs solar panel systems near me?
To find the top solar panel installers near you, take a look at our article on Madison's best solar panel companies.
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 slated to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
I want to change out my appliances for ones that are more energy-efficient. Are there any benefits I can apply for?
The new Inflation Reduction Act introduces several incentives designed to reward homeowners who make 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.
What if I am planning to add a solar system 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, and 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 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.