Solar Tax Credit 
and State Incentives/Rebates

What is the Solar Tax Credit?

If you install solar energy equipment in your residence any time this year through the end of 2032, you are entitled to a nonrefundable credit off your federal income taxes for 30 percent of your system cost and other projects needed for the system, Tree cutting, roof repair, trenching and more. There’s no limit on those other projects as long as they are for the system. you are entitled to that 30 percent tax break whether you spend $20,000 or more than $100,000 on costs associated with a residential solar system.

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Is the Tax Credit Around for Good?

If your interested in going solar I would do it sooner rather than later because the tax credit is not going to be around forever. Although it still has some time the 30% mark will end in 2032 and then you only have 2 more years left but at lesser rates. check out the image below. 

 

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How does someone qualify for the  Solar Tax Credit?

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• Purchasing a solar system for your home and the system has to be on your home that you own or co-own and located in America. You must live in the home for some part of the year so the property doesn’t have to be your primary home. 

• You must own the system. Every system we offer is going to be 100% yours. we do not offer leasing.

• You must be working and or paying on taxable income. If you do not owe or pay any of these Taxes there is nothing to be refunded towards you. Please speak with your Tax professional.

• Your system must be up and running before 2017, any systems before that do not.

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Does my unused Tax Credit move forward to the following years?

Yes, if the value of your solar tax credit is more than your tax liability, then you can move the remaining credit forward for as long as the tax credit exists. For example, if your solar tax credit is worth $10,000 and your tax liability is only $8,000, you can claim the $8,000 the first year and carry the remaining $2,000 into future years for as long as the Solar Tax Credit is around, which is scheduled until 2034).

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How does the Solar Tax Credit work if I don’t owe taxes?

As a non-refundable credit, the solar tax credit may only be used to lower your income tax liability. If you don’t have any tax liability, you can carry the credit forward into future years and use it to reduce any tax liability you may have in the future. If you are retired or do not expect to have taxable income soon, Be sure to consult a tax professional and make a plan for claiming your solar tax credit.

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Solar Energy Sales Tax Exemption

In Minnesota state sales taxes are fully exempt and will prevent you from paying any sales taxes on your solar energy system and equipment. A form usually needs to be filled out to be tax-exempt but we can do that for you. you will never be charged for sales tax.

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What Expenses Are Eligible for the Solar Tax Credit?

According to the Internal Revenue Service, these expenses are eligible for the solar tax credit:

• Solar photovoltaic (PV) panels. 

• PV cells that are used to power an attic fan (but not the fan itself).

• Contractor labor for on-site preparation, assembly, or original installation.

• Permitting fees, inspection costs, and developer fees.

• All equipment needed to get the solar system running, including wiring, inverters, and mounting equipment.

• Storage batteries. (You can claim the tax credit for these even if you buy and install them a year or more after you install the solar system; eligible units must store at least 3 kilowatts.)

• Sales taxes on eligible expenses.

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Net-Metering

Minnesota has net-metering laws, also called interconnection laws. 

These laws allow you to sell excess energy your solar panel system generates back to the power grid. Minnesota residents can choose to receive a standard compensation rate per kW or a credit applied to future electricity bills.

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Xcel Energy’s Solar Rewards Program

Xcel customers have the opportunity to take advantage of the Solar Rewards Program, which is backed up by the Minnesota Renewable Development Fund. Xcel pays homeowners $0.07 per kilowatt-hour (kWh) of power from the solar production annually for up to 10 years. However, I rarely speak about this because you will be put on a very long waitlist and may never get accepted anyway. The Projects on the waitlist are not guaranteed to receive funding.

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Xcel Low-Income Solar Program

Income-qualified Xcel customers who receive benefits under the Low-Income Heating Assistance Program (LIEAP) or Weatherization Assistance Program (WAP) can receive a $2,000 per kilowatt (kW) solar rebate from Xcel. You must meet the following criteria to qualify:

• Make $52,000 or less for a family of four. 

• Have a system sized to a maximum of 120% of your usage. 

An average-sized 6 kW system would receive a $12,000 rebate based on this criteria.

More resources: Xcel Solar Rewards page

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SolarSense

Minnesota Power’s SolarSense program provides tax rebates to reduce your up-front solar panel installation costs. The program is available to all Minnesota residents. Funds are awarded to customers on a lottery basis, so you must submit a SolarSense application to be considered.

The program opens for applications on March 1 each year. Applications are accepted for three calendar days. Some homeowners are placed on a waitlist if more applications are received than available funds. Visit the program’s website to understand its current funding and availability better. 

More resources: Minnesota Power SolarSense

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