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Every state has different incentives that will encourage a home solar system 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:
As a whole, the state of Indiana is looking to become more solar friendly, and these Indiana solar incentives will only help to make that possible.
The cost to install solar panels in Indiana is higher than it is in other states, typically between $18,000 and $28,000. Therefore homeowners are finding it hard to justify the costs of these systems. However, the electric rates in Indiana are a bit high, and the fact that four distinct seasons impact the amount of electricity needed are all reasons to install solar panels for Indiana homeowners.
Now is the time to take advantage of certain Federal tax rebates that the federal government is offering for a limited period of time. In addition, if you sell your home, your property value will increase with a PV system.
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.
The solar costs in Indiana will vary depending on the size of the system you put in and the installation costs involved with the process. Homeowners across Indiana state are spending more than $15,000 for most systems and sometimes as much as $30,000.
Although Indiana is not the most solar-friendly state when it comes to rebates and incentives, there are a few things in place like the Renewable Energy Property Tax Exemption. With these things available, you can still save thousands of dollars.
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 the 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.
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|Federal Solar Tax Credit (ITC)||Indiana residents can take advantage of the Federal Solar Tax Credit and get a discount of up to 26% applied to their tax return. If you purchase $20,000 worth of solar panels, you can get a credit for more than $5,000 on your next tax return. Remember, this does require you to come out of pocket first.||December 31st, 2023|
|Indiana Solar Tax Incentive||There are no taxes charged on a purchase of 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 the installation of solar panels; this can apply to a new build or a retrofit. There is no time limit as to 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 that will ensure you get the proper rebate and incentives at the end. Always follow 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. Currently, the program allows you a tax credit of up to 26% of the cost of your solar installation. The solar system will need to be paid for out of pocket upfront, and then it will come back to you as part of a tax return. Although you will have to front the money for this project, it will be returned within a short period of time.
It’s important to note that this Federal tax credit will drop from 26% to 22% in 2023. In addition, the bill is set to expire at the end of December 2023. This is undoubtedly a reason to consider having your solar panels installed before that date. The Federal Solar Investment Tax Credit is something that you can combine with other initiatives to keep total costs down.
Unfortunately, the state of Indiana does not currently have a tax credit in place at the state level. Many states like South Carolina 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 does offer a sales tax exemption on the purchase of a solar system for your home. The good news here is that you can save a total of 7% (the current tax rate) on purchasing your system. The 7% is not a rebate and will simply 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 across 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 quite a bit of 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 that will help secure a loan for renewable energy resources. 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; simply 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, but these programs are set to expire before 2024. The rate of 30% savings is going down to 10% in 2023, which is a significant decrease in the money saved. If you have a business in Indiana, now is the time to start looking into which of these programs will be worth the money.
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 to reduce the overall costs of the system and improve the long-term financial stability of this investment.
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 the state of Indiana. The program allows commercial buildings to apply to receive 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 with a solar system, you will not have to worry about proving this.
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 type of 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 one that 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 to manage the out of pocket costs for your solar installation.
A complete solar system for a home in Indiana is typically going to cost more than $20,000. Some homeowners will install a partial system until they can afford the full price of the system. In addition, the tax incentives, clean energy programs, and net metering programs certainly help to reduce costs of a solar panel system.
Solar panels are not offered for free in Indiana. Homeowners and business owners will need to be able to afford the upfront costs of the panels in order to have the system installed.
Currently, the only solar rebate available for Indiana homeowners is the Federal ITC rebate. This comes back to you in the form of a rebate on your taxes the year after you have installed your solar energy system. If you don’t owe taxes that year, the credit can carry over for several years.
With no state initiatives to help homeowners save money on solar panels, only about 100,000 Indiana homes have solar panels. Hopefully, as prices come down and incentives increase, this number will change considerably.
Solar panels do not increase property taxes in Indiana. Instead, property taxes will state 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 26% rebate on the total cost of the solar system. This 26% is being lowered to 22%, and at the end of 2023, the program will end entirely. Make sure you install your solar system with the correct requirements and in time to ensure this ITC program is part of it.
At House Method, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.
Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated all of each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all of the solar energy companies on the market so you can have the information you need to make the best choice for your home.
We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:
Plan Options (30): Do they provide a variety of plan options? We looked at the number of plans each solar energy company offered and the flexibility of adjusting the plan.
Services offered (20): How many services are offered in each plan? We looked at whether the company manufactures its own solar panels, whether it contracts out installation, and what additional products each company offers.
Trust (10): What do customers say after their solar panels are installed? Does this company offer a guarantee? We considered how satisfied customers are post-service if the company does what it says it will, BBB accreditation, and service guarantees.
Prices (10): How reasonable are the costs of the plan or service in comparison to the industry average? We compared the costs of each company to competitors that offer the same solar energy services.
Unique perks (10): Does the company offer discounts or special services such as financial incentives, rebates, or a useful mobile app? We looked for extras each company offers that set them apart from the competition.
Customer Service (10): How is the customer experience when contacting the company? We considered the speed of response, weekend/holiday availability, and ease of communication through phone calls, email, and online chat functions.
Nationwide availability (10): How many states does the company offer its services? Companies that operate nationally and in all zip codes are favored over those with limited availability.
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