2024 Indiana Solar Incentives, Tax Credits, Rebates, & Exemptions

Last updated: December2024

Indiana homeowners can save $6,498 on average through solar incentives when they switch to solar energy.

Going solar is a great step towards reducing your carbon footprint and your monthly electricity bills. Although solar energy is a big investment, incentives can lower the upfront cost and make it more accessible to all. Let’s dive into what’s available in the Hoosier State.

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Overview of Indiana solar incentives and rebates

Incentive	Estimated average annual savings	Eligibility	About
Federal solar tax credit	$6,498	All tax-paying U.S. citizens	30% tax credit applied to federal income taxes
Indiana solar property tax exemption	$124	All tax-paying Indiana citizens	Solar customers are 100% exempt from raised property taxes after a solar installation.

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Calculate how much you can save with Indiana incentives

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Federal solar tax credit

Indiana homeowners who invest in solar can save 30% on their solar panel installation through the federal solar tax credit.

The average solar panel system in Indiana will earn a federal solar tax credit of $6,498. However, it's important to keep in mind that this financial incentive is not an upfront payment. The tax credit reduces your federal income tax liability, so you'll see the savings when you file your taxes.

If what you owe in taxes is less than your federal tax credit, you'll owe $0 for the year. Any remaining tax credit value can be rolled over to next year. There's no income limit for the federal solar investment tax credit (ITC), so you can claim it as long as you have taxable income!

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Indiana solar property tax exemption

Installing a solar energy system can potentially raise the value of your home. But raised property value can come with higher property taxes. Thankfully, Indiana offers a renewable energy property tax exemption where homes with solar power are 100% exempt from paying additional property taxes after an installation.

Experts at SolarReviews found that homes with solar sell for 6.8% more on average. Considering the median home value and the state’s average 0.75% property tax rate, those with home solar can save an estimated $124 per year in property taxes.

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Indiana net metering and solar buyback plans

The largest investor-owned utility companies in Indiana offer their own solar buyback programs, each with its own set of rates and regulations. The table below gives an overview of what you can expect from each utility’s program guidelines

Utility	Program overview	Billing
AES Indiana	Customers can sell excess solar energy credits back to the grid for a fixed rate, which is currently $0.03935 per kWh.	Unused credits can rollover to future electricity bills indefinitely.
Centerpoint Energy	Customers can sell excess solar energy credits back to the grid at the company’s marginal distributed generation (DG) price, which is currently $0.03833 per kWh.	Customers are still required to pay Centerpoint Energy’s monthly minimum bill. Unused credits at the end of a billing cycle will be surrendered to the utility.
Duke Energy Indiana	Duke Energy offers an Excess Distributed Generation (EDG) tariff that compensates customers at market/wholesale price plus a 25% premium. The current price is $0.041542 per kWh.	EDG credits can rollover to future electricity bills indefinitely. Customers are also required to pay Duke’s monthly minimum bill.
NIPSCO	Customers can choose between a Feed-in Tariff or Excess Distributed Generation Tariff to sell their excess generated solar energy.	Any unused bill credits from customers can rollover to future electricity bills indefinitely.
Indiana Michigan Power	I&M offers a program called Create Green, where Customers can sell excess solar energy credits back to the grid for a fixed rate, which is currently $0.03610 per kWh	Unused credits can rollover to future bills, but customers are required to pay non- bypassable bill charges.

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Indiana installation costs

A solar power system in Indiana costs $2.49 per watt, which would make the total cost of the average 8.7 kW system $21,663 before any incentives are applied. Once you factor in the federal tax credit, that amount falls to $15,164.

Federal tax credit: $21,663 x 30% = $6,498

Total savings: $6,498

Effective system cost: $21,663 - $6,498 = $15,164

These savings don’t include the additional utility bill savings from the solar buyback programs offered by your utility service provider. Those savings will vary depending on the kind of compensation rate offered to customers.

The total cost of solar panels will depend on a few factors, like how many solar panels you install, the solar company used, and the characteristics of your roof.

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Do incentives and rebates make solar panels worthwhile in Indiana?

We would like to see Indiana offer more rebate programs to help lower the initial cost of photovoltaic systems. While a solar property tax exemption helps, a real game-changer will be if your utility offers a decent solar buyback program to help reduce those home energy bills. 

However, more solar programs targeting low-income households might be on the horizon. The Indiana Community Action Association Inc. (IN-CAA) is a nonprofit that serves the Indianapolis, Columbus, Fort Wayne, and Gary regions. IN-CAA is one of the many programs that received funding from the Environmental Protection Agency’s (EPA) Solar For All Initiative. So, keep an eye out for programs opening up in the near future.

In the meantime, we recommend getting at least three quotes from reputable solar installers to maximize your savings and get the best deal. Or, check out SolarReviews’s extensive directory of solar companies in Indiana to find one that could be a good fit for you.

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Calculate how much you can save with Indiana incentives

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Indiana solar incentives: FAQ