In the state of Indiana, embracing solar energy not only contributes to environmental sustainability but also comes with several financial incentives. These benefits make it an attractive option for homeowners considering a switch to renewable energy sources.
This blog explores Indiana Solar Tax Credit and incentives that can significantly reduce the initial cost of installing a solar system.
Indiana’s Solar Incentives and Rebates
Indiana offers several financial incentives for installing a solar photovoltaic system, which can significantly reduce the costs associated with going solar. These incentives include net metering, solar easement laws, and various tax benefits.
Net Metering in Indiana
Net metering is a policy that allows homeowners with solar energy systems under 1 MW in size to feed their surplus energy back into the grid, earning credits on their electricity bill. However, it’s important to note that Indiana is phasing out net metering after 2022, emphasizing the importance of acting quickly to take advantage of this benefit.
Solar Easement Laws
Solar easement laws in Indiana ensure that your solar installation isn’t impeded by shading from neighboring properties. These laws also prevent planning and zoning authorities from obstructing your home solar panel installation.
Indiana Solar Tax Benefits
There are several tax benefits that significantly sweeten the deal for solar in Indiana. These include the renewable energy property tax exemption and the Indiana sales tax exemption.
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. This means that although your solar installation adds value to your property, the added value can’t be counted when a 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. This means you won’t have to pay sales tax on your solar modules, racking, and inverters as they are directly involved in the production of electricity.
Federal Solar Investment Tax Credit
The federal solar investment tax credit can significantly reduce the cost of going solar in Indiana. If you install your photovoltaic system before the end of 2032, you can get a tax credit equal to 30% of the cost of your solar panel system. This includes equipment, labor, and permitting costs.
NIPSCO Feed-In Tariff
If you’re within the service area of the Northern Indiana Public Service Company (NIPSCO), you can enroll in their special program to earn excess credit for your solar power. You can install a solar system up to 10 kW in size and choose to sell all the electricity back to NIPSCO at a rate of $0.15 per kWh, or declare a kWh allotment to sell back to NIPSCO at this rate while using the rest for yourself.
Solar System Return On Investment (ROI) In Indiana
Investing in a solar system in Indiana can yield substantial financial returns over time. The exact return on investment (ROI) will depend on several factors, including the size of the solar installation, the cost of electricity in your area, and the amount of sunlight your property receives. However, with the various incentives and Indiana solar tax credit available, homeowners can expect to see a payback period of around 7-10 years for their solar system.
After this period, your solar system could effectively provide you with free electricity for the remainder of its lifespan, which is typically 25 to 30 years. If you consider the rising electricity costs, the financial benefits of going solar in Indiana become even more significant.
Solar Power For Businesses In Indiana
Businesses in Indiana can also significantly benefit from installing solar power systems. In addition to the residential incentives, commercial entities can take advantage of the Modified Accelerated Cost-Recovery System (MACRS). MACRS is a method of depreciation in which a business’s investments in certain tangible property are recovered, for tax purposes, over a specified time period through annual deductions.
Commercial entities can also benefit from the federal solar investment tax credit, which is equivalent to 30% of the cost of the solar panel system, including equipment, labor, and permitting costs. By harnessing solar power, businesses can significantly reduce their energy costs, improve their bottom line, and showcase their commitment to environmental sustainability.
Solar Energy And Job Creation In Indiana
The solar industry also contributes significantly to job creation in Indiana. As the demand for solar installations increases, so does the need for skilled professionals in various roles, including installation, manufacturing, sales, and project management. This growth provides a boost to the local economy and offers numerous opportunities for job seekers interested in green energy sectors.
Environmental Impact Of Solar Energy In Indiana
Beyond the financial benefits, adopting solar power in Indiana has significant environmental benefits. Solar power is a clean, renewable source of energy that reduces reliance on fossil fuels, thereby reducing greenhouse gas emissions. By going solar, homeowners and businesses in Indiana can play a crucial role in combating climate change and contributing to a more sustainable future.
Harnessing Solar Energy With Indiana Solar Tax Credit
Harnessing solar energy in Indiana is a financially smart and environmentally conscious decision. The incentives and Indiana Solar Tax Credit significantly reduce the initial cost of installing a solar system. However, it’s essential to act soon, especially with the impending phase-out of net metering in Indiana. With attractive financial incentives and tax credits, the switch to solar is not only a sound environmental decision but also a financially smart one.
Embrace the power of the sun today, and start your journey towards a greener, more sustainable future with solar incentives. Visit Gov Relations and check our guides to learn how to get started.