Indiana experiences a varied climate with around 186 sunny days annually, providing a reasonable amount of sunlight for solar energy initiatives. While not leading in terms of the number of sunny days, Indiana’s weather conditions still present opportunities for viable solar power projects. Indiana has several financial incentives for installing a solar photovoltaic system. Here are some of the incentives available to Indiana home and business owners:
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Federal Solar Investment Tax Credit (ITC):
Homeowners that qualify for the Solar ITC can take advantage of a tax credit for 30% of the total purchase price of their solar system, no matter the system size or cost. This credit applies to all solar projects that begin construction in 2023 and will last through 2033, at which point it will drop to 26%.
Incentive and Rebates
Unfortunately, Indiana does not offer any rebates for people who purchase solar panels for their home3. However, the state does offer tax exemptions to help make solar power more attractive. On November 3, 2023, the Indiana Office of Energy Development (OED) announced a Request for Services (RFS) for potential contractors to assist with planning, designing, and administering the Home Energy Rebate Programs. The allocation for the State of Indiana is $182 million to assist Hoosiers in improving the energy efficiency of their homes through whole-home retrofits and high-efficiency home appliances. The rebate programs are expected to become available to Hoosiers mid- to late- 2024.
Renewable Energy Property Tax Exemption:
For any new solar PV system installed in Indiana, the assessed value of the system is exempt from your property taxes. That means that, even though your solar installation adds value to your property, the added value can’t be counted when property is being assessed for taxes.
Indiana Sales Tax Exemption:
When you purchase a solar energy system in Indiana, many of the components are exempt from sales tax under Indiana’s sales tax exemption for electrical generating equipment. According to the law, you don’t have to pay sales tax on your solar modules, racking, and inverters because they are directly involved in the production of electricity.
Net Metering:
Solar energy systems under 1 megawatt (MW) in size are eligible to participate in net metering, which allows you to send your extra electricity back into the grid and get credits on your electric bill. When your panels aren’t producing all the electricity you need, you can use your credits instead of having to pay for electricity from your utility.
Further information and programs can be found at the Programs.Dsireusa.org
