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Federal Solar Tax Incentives

federal solar tax credit

The federal solar income tax credit is a, 30% of the total solar energy installation cost,  tax credit.  This federal solar income tax credit is available to both families and businesses.  There are two important key understandings related to the federal solar income tax credit.  The first is that money owed or paid to the IRS,  can now be applied toward paying for your family or busineess, 25 -30 year, electric utility costs.  The second is that a family or business must have the federal income tax liability, in which to apply the federal income tax credit.  Tax liability can be an issue for those that are retired or some business situations.   Even if you don’t have enough tax liability to claim the entire credit in one year, you can “roll over” the remaining credits into future years for as long as the tax credit is in effect. However, remember that if you sign a lease or PPA with a solar installer, you are not the owner of the system, and thus you cannot receive the tax credit.

2016 – 2019: The tax credit remains at 30 percent of the total solar installation cost of the solar energy system. 

2020:  The federal income tax credit will be reduced to 26 percent of the total solar installation cost of the solar energy system. 

2021:  The federal income tax credit will be reduced to 22 percent of the total solar installation cost of the solar energy system. 

2022+: The federal income tax credit will be reduced to 0  percent of the total solar installation cost of the solar energy system for residential installations. The federal income tax credit will be reduced to 10  percent of the total solar installation cost of the solar energy system for any commercial installation. Owners of a new commercial solar energy systems can deduct 10 percent

Lumin Energy Services the States of Indiana, Illinois, Kentucky, Missouri and Tennessee

There are multiple incentives for installing solar in the Midwest. These solar incentives fall into several categories including; federal, state and utility solar energy production incentives.  Read below to see what incentives are available in your state!

Indiana State Solar Incentives

solar in Indiana

Sales Tax Exemption: Indiana state law provides for a certain part of your solar installation to be exempt from sales tax.  

Net-Metering: Solar Systems under 1 megawatt can send excess electricity produced, and not consumed, back into the grid.  This excess can be credited to your utility bill. When you do use power from your utility, at night for example, you then have credits built up.  The rate at which you receive credits, however, will vary depending on your utility.  Your Lumin Energy Agent will explain this to you in full detail.

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 cannot be considered when the property is being assessed for taxes. 

Illinois State Solar Incentives

solar in Illinois

Solar Renewable Energy Credits (SRECs)
Illinois’ renewable portfolio standard (RPS) commitments now include the commitment to producing 25 percent of Illinois state electricity from renewable resources, by 2025. That’s an aggressive goal to achieve, and to make this happen, the state has an incentive that rewards homeowners for helping Illinois reach that target. For each megawatt hour (MWh) of electricity your solar system produces, you will be granted one Solar Renewable Energy Credit (SREC) that you can then sell in the market, creating an income source for the life of the system. 

Illinois Net-Metering
Illinois’ net metering policy ensures your utility will buy back any excess electricity your solar system produces. Net metering allows you to benefit from the full value of your solar panels and is a great way to balance out your electricity production and consumption, which does not always happen at the same time. For example, you use more electricity in the evening when the sun is not shining. Commonwealth Edison offers the top utility net metering program in Illinois.

Property Tax Break
Illinois does not assess the value of your property with the solar panels. As a result, your property tax bill will not go up if you install solar panels.

Kentucky State Solar Incentives

solar in Kentucky

Net-Metering: Kentucky policy does require utilities, other than TVA, to participate in net metering. Net metering allows you to send excess electricity produced, that you do not use, back into the grid.  The utility will credit your utility bill for this excess.  Net metering allows you to balance between production and consumption.

Green Power Providers (TVA): Kentucky customers in eligible TVA areas can choose to particpate in the Green Power Provider program.  This program allows you to sell all of the energy your system produces to TVA and you are issued credits through your utility.  If you want to see if your utility participates you can click here Green Power Providers.

Missouri State Incentives

solar in Missouri

Solar System Rebates: Missouri is one of the few states in the Midwest that offers solar rebates. The current program provides $0.50 per watt for customers that apply by December 31, 2018 and install their system by June 30th 2019.  After January 1 the rate drops to $0.25 per watt.  This means, for a 10 kw system, a homeowner could receive a rebate of $5,000 for installing solar. NOW is the time to take advantage of this rare solar incentive!

Net-Metering: Net metering allows you to send the excess electricity that you produce and do not use back into the grid.  Your utility will credit you for this electricity.

Property Tax Exemption: The installation of a solar panel system will be exempt from the assessment of your property taxes in the state of Missouri.

Tennessee State Solar Incentives

solar in Tennessee

Sales Tax Exemption: Tennessee does not charge sales tax on the cost of your solar system.  This can save you considerably on your upfront costs.

TVA Green Power Providers: TVA, in an effort to  areas can choose to particpate in the Green Power Provider program.  This program allows you to sell all of the energy your system produces to TVA and you are issued credits through your utility.  If you want to see if your utility participates you can click here: Participating Utilities

 

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Our Service Area: Missouri, Tennessee, Illinois, Indiana and Kentucky

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