There are several incentives that make going solar a good investment! Primarily, Indiana’s net metering policy, which allows residents and businesses to sell energy back to the grid at a 1:1 ratio, and the 26% Federal tax credits for both residential and commercial solar.
Go Solar with Solarize Indiana
A community Solarize team is able to sweeten the deal by reducing the haste of finding a solar installer, teaches the public about the basics of solar, and offers residents a slight group discount.
Because solar installations are often high upfront costs, often homeowners and businesses will get a secured solar loan or a Home Equity Line of Credit (HELOC), which takes advantage of the equity in your home to keep interest rates low. The payments to repay this debt should be cheaper than the cost of your current electricity bill, if you have good credit. Furthermore, the Federal Housing Authority (FHA) offers a loan called a “PowerSaver Second Mortgage” (Title 1) loan that provides up to $25,000 in financing for energy-focused retrofitting of your home. Finally, your solar contractor may be able to connect you to other loan or financing options.
Net metering programs allow customers who install solar panels on their property to receive credit on their utility bills for the energy that their system produces. Meters essentially run backwards to track your energy production, creating a credit that is then applied to your bill when you are drawing from the grid. As result, net metering substantially lowers monthly energy bills and many home owners only have a monthly connection fee. Generally, net meter is often credited as the same cost going into the grid as it is going out (i.e. retail rate). However, only investor-owned Utilities are required to credit net metering at the retail rate of electricity. Net metering policies vary among municipal utilities and rural electric cooperatives. Learn more about the fight to maintain net metering and the differences between electric Utility companies.
The state policy change in 2017 set a phase-out timeline for new projects to sign up for net metering. Solar projects installed before July 1, 2022 may be able to receive net metering until July 1, 2032 – or at least 10 years. It is possible that utilities could hit a cap on the total amount of net metering capacity they are required to offer before that date, so it is better to install solar panels well in advance of that date.
For any solar systems installed after December 31, 2011, the assessed value of the system is exempt from property taxes. Property owners that wish to claim this deduction must fill out Form 18865 and file it with the local county auditor and/or assessor. Learn more about the Renewable Energy Property Tax Exemption from the Department of Local Government Finance who outlines the incentive.
The Indiana Office of Energy Development, Energy Grant Resources page periodically offers grant opportunities that may be applied to Indiana businesses and nonprofits.
The federal tax credit available for solar is available for businesses and individuals as a non-refundable tax credit for 26% of the total cost of a solar panel installation. It begins phasing down after 2022. Projects installed and paid for in 2021 will be eligible to receive a credit for 26% of the system cost when filing taxes.
Solar Renewable Energy Credits (SRECs)
Solar renewable energy credits (SRECs) trading systems allow you earn a small amount of money for each 1000 kilowatt-hour (kWh) you produce. Indiana does not have an SREC trading system; however, many solar owners are able to sell in other states. Owners of small systems enter into a long-term contract with third-party aggregators who will then sell SRECs to utilities in other states – generally Ohio. Learn more about SRECs here.