Updated Jan 10, 2023
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Every state has different incentives to encourage a home or commercial solar system. Unfortunately, Indiana is not known for being the most solar-friendly state, and you may have to get creative when investing in a solar panel setup in Indiana. In our guide detailing these Indiana solar incentives, tax credits, and rebates, we provide the following:
The state of Indiana is looking to become more solar-friendly, and these Indiana solar incentives will only help to make that possible.
Electric rates in Indiana are high, and four distinct seasons affect the electricity needed. Going solar can help reduce or eliminate your utility bills, depending on your system size and home energy needs.
Going solar can also be a personal preference to go green. The ability to produce your own electricity and move away from the grid is certainly a positive to going solar in Indiana. Additionally, if you sell your home, your property value will increase with a photovoltaic (PV) system.
The cost to install solar panels in Indiana is higher than in other states, typically between $18,000 and $28,000 but will vary depending on the size of the system.
Although Indiana is not the most solar-friendly state regarding rebates and incentives, a few programs, like the Renewable Energy Property Tax Exemption, are available to help you reduce or offset the cost.
Although there are no state-level incentives for solar savings in Indiana, you can decrease system costs by looking for tax incentives and rebates. Most homeowners in Indiana are saving several thousand dollars on a system with Federal rebates and the sales tax exemption. There are also local initiatives that can add to the total amount saved on a solar system in Indiana.
|Federal Solar Tax Credit (ITC)||Indiana residents can take advantage of the Federal Solar Tax Credit and get a discount of up to 30% applied to their tax returns. If you purchase $20,000 worth of solar panels, you can get a credit for $6,000 on your next tax return. Remember, this does require you to come out of pocket first.||December 31st, 2032|
|Indiana Solar Tax Incentive||No taxes are charged on purchasing a solar system for residential or commercial customers in the state of Indiana.||None|
|Net Metering||Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill. All energy providers need to offer this option to homeowners, but the credit rates in Indiana are not always that high.||None|
|Indiana Property Tax Incentive||Property taxes will remain unaffected by installing solar panels; this can apply to a new build or a retrofit. There is no time limit for how long your taxes will remain unaffected by the solar panels; it can continue as long as you own the home.||None|
Before looking into alternative energy sources, it is essential to do your research. Sometimes there are small steps to take throughout this process to ensure you get the right rebate and incentives. Always follow the requirements exactly if you plan to get the full incentive.
The Federal Solar Investment Tax credit is available in all 50 states, Indiana included. This program will give you a discount on your next federal tax return. You pay for your solar system up-front, and when you file your income taxes, its total cost will reduce your overall tax burden.
Currently, the program allows you a tax credit of 30% of the cost of your solar installation. As part of the recently-passed Inflation Reduction Act, this federal tax incentive has been extended through the end of 2032.
Unfortunately, the state of Indiana does not currently have a tax credit in place at the state level. Many states offer additional percentage savings that can be combined with the Federal tax credit. It’s important to note that policies for solar energy tax credits are continually changing, and there could be a policy that will make Hoosier quite happy in the next few years. More and more states are adopting these to encourage more solar installations.
Even though there is no tax credit, the state of Indiana offers a sales tax exemption on purchasing a solar system for your home. The good news is that you can save 7% (the current tax rate) on purchasing your system. The 7% is not a rebate and will not be charged at the time of purchase. This can help to save $1000 or more depending on the total system cost.
Solar panels increase the value of your home, which is a positive for most homeowners. However, this assessed value of the system typically causes an increase in taxes that can be difficult for some to afford. Luckily Indiana does not put a limit on this property tax exemption. Some states will have it in place for just a few years or limit the total amount spent on the system, but throughout Indianapolis and the entire state, you will not see this as an issue.
Indiana net metering is the process of creating more energy than your home needs and supplying some of that energy back to a utility company. Net metering also allows you to bank excess energy to use on a cloudy day or during the summer heat when your solar panels can’t quite keep up with your air conditioning.
The state of Indiana does require all major utilities to offer net metering. The problem is that they are not required to purchase back electricity at a retail rate. This means the kilowatt-hour price you get for your excess electricity will be at the wholesale rate. This is considerably less and can make it hard to even justify the net metering.
Large businesses will sometimes have an easier time getting energy providers to create a net metering policy or to get an incentive to increase energy efficiency. With the high costs of PV, Solar, and Geothermal installations, the interconnection costs leave room for savings in this sector.
Although there are no specific nonprofit incentives in the state of Indiana, plenty of government and commercial savings plans can help your nonprofit become more energy efficient. It’s also important to remember that the Federal tax incentive is also for nonprofits and businesses.
The United States Department of Agriculture offers a REAP grant or Rural Energy for America program to help secure renewable energy resources loans. If you supply your contact information to the USDA, they will help ensure loan financing and grant funding for agricultural producers.
In addition, small rural businesses can also access these resources for installing or upgrading renewable energy systems. With this USDA REAP grant, you won’t have to search for funding or try to negotiate; lay out your plans, and the USDA will tell you what is available.
For a federal corporate income tax return, there is a 30% credit against the cost of any system that was placed into the building during that year. If your solar panel installation is tens of thousands of dollars, you may see a large tax incentive for installing solar.
The Federal Solar Tax Credit is still one of the best ways to save money on solar energy and was recently extended through the end of 2032.
Net metering is also available at the commercial level for Indiana business and property owners. Although net metering is not quite the same as taking advantage of solar rebates, it can help reduce the system’s overall costs and improve this investment’s long-term financial stability.
Remember that Indiana requires providers to offer net metering, but the rates you are paid for the energy produced tend to be considerably lower than others.
The Indiana Office of Energy Development is trying to incentivize solar installation in Indiana. The program allows commercial buildings to apply for up to $80,000 for community energy conservation projects.
There is a list of technologies that are covered through this policy, and it is expected that you will partially pay for the system in addition to the grant. The project must demonstrate a measurable improvement in energy efficiency or renewable energy initiatives. The good news is that you will not have to worry about proving this with a solar system.
Of course, with a program like this, there is a certain amount of regulation and approval that needs to take place. Certainly, look into this before starting any work on the system.
Although Indiana may be a little behind on the state-level solar incentives, it is always a work in progress. Installing a Photovoltaic solar power system is a big decision but will continue to pay off. Solar power is continuing to get more affordable throughout the United States, and we are hopeful that some new incentives will come into play for Indiana homeowners. For the time being, take full advantage of what the Federal government is offering before the policy expires.
Solar is worth it in Indiana because of the money it can save you on your electricity bill. However, the upfront costs of solar are a bit cost prohibitive for many Indiana residents. Keep an eye out for loan programs, tax exemptions, and rebates that help manage your solar installation’s out-of-pocket costs.
A complete solar system for a home in Indiana will typically cost more than $20,000. Some homeowners will install a partial system until they can afford the full price of the system. In addition, tax incentives, clean energy programs, and net metering programs certainly help reduce solar panel system costs.
Solar panels are not offered for free in Indiana. Homeowners and business owners will need to be able to afford the up-front costs of the panels to have the system installed.
The only solar rebate available for Indiana homeowners is the Federal ITC rebate. This comes back to you as a tax rebate the year after you have installed your solar energy system. The credit can carry over for several years if you don’t owe taxes that year.
With no state initiatives to help homeowners save money on solar panels, only about 100,000 Indiana homes have solar panels. Hopefully, this number will change as prices come down and incentives increase.
Solar panels do not increase property taxes in Indiana. Instead, property taxes will be the same because of initiatives that the state has put into place to keep these costs down and ensure people are not penalized for making these renewable energy upgrades.
The current Federal ITC programs allow a 30% rebate on the total cost of the solar system. This program was extended through the end of 2032 as a part of the Inflation Reduction Act, passed in August 2022.
Solar in Rhode Island is worth it because of the higher costs of electricity in Rhode Island. Overall the cost of living in Rhode Island can be greatly reduced by installing a system like this. Solar is worth it for the financial benefits and the environmental impacts in the state of Rhode Island.
Solar panels in Rhode Island are about $20,000, but this will change based on the number of incentives, rebates, or grants you qualify for. In addition, the total costs can vary based on the size of your home and how much electricity is needed.
Solar panels are not offered for free in Rhode Island. The best saving program for clean energy in Rhode Island is the Federal ITC program and the REG program.
Currently, the solar rebates in Rhode Island include federal rebates and the state-level REG program. These will help to ensure that you are saving money at the time of purchase as well as over time
Solar panels will increase the value of your home, but they will not raise your taxes in Rhode Island. Luckily taxes in Rhode Island are not impacted at the residential or commercial level for the installation of green power initiatives.
The current Federal ITC programs allow a 30% rebate on the total cost of the solar system. There is no additional tax benefit at the state level, but this program is set to provide 30% rebates through the end of 2032.
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