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 March 14, 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/
The phrase "solar incentives" refers to 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. Solar incentives may include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the Wisconsin government and some by your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off the total price before tax credits are calculated.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Madison utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
- Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your house.
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 applies 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, accessories, equipment and labor — although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
Curious how the ITC might apply to your specific situation? Get in touch with your local Madison solar panel installer to get more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit runs until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; this amount will then decrease slightly each year until the current program ends. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Madison solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Like with federal incentives, these may include rebates, tax credits and more. These incentives — which might be given by the state of Wisconsin, or by your county or municipality — could be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Madison
You can apply for solar incentives from the Wisconsin government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. If you're ready to make the change to solar energy, getting in touch with your local Madison solar panel installation expert is an excellent place to start.
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
EcoWatch's Madison, WI Solar Incentives FAQs
What if I am planning to add solar panels to a rental property, vacation home or commercial property? Can I still qualify for incentives?
While we recommend speaking with your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives apply to a second home, provided that it is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the specifics.
How much can I save on my electric bill annually if I add solar panels to my house in Madison?
Generally, Madison homeowners who install solar panels save around $1,140.28 per year, or around $21,665.41 over 20 years after they make the switch.
What are the best solar panel installation companies near me?
To learn about the best solar panel installers near you, read our article on the best solar companies in Madison.
When does the federal solar tax credit end?
The federal solar tax credit, formerly called the ITC and now called the Clean Energy Credit, is set 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.
If I switch my appliances out for ones that use solar energy, are there benefits I can claim?
With the passage of the new Inflation Reduction Act, there are a variety of new financial incentives to encourage you to make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
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.