Adding solar panels to your Michigan home can be a substantial investment, but it pays off in terms of giving back to the environment and because of the potential long-term savings on your electric bill. But there is another huge benefit of going solar. There are tax credits and incentives to having a residential solar energy system. This return on your investment is definitely worth investigating. We’ll highlight the opportunities you have on tax incentives below.
Federal Solar Tax Credit
If you paid for your solar energy system via either cash or a loan, you’re in luck. As long as you install your solar system in either 2021 or up to the end of 2022, the federal solar tax credit gives you the chance to reduce the cost of your solar panel system by up to 26 percent. This includes the cost of the panels, installation, permitting and more. This tax credit falls to 22 percent after 2022, so it’s worth your time to install now while this value-saving credit is in place.
Net metering is the practice of selling excess unused energy generated by your solar panels back to the grid for credits on future electric bills. In combination with the potential savings solar energy already adds over time to electric bills, this adds another cost-saving measure. Though some utilities give full retail credit for net metering, not all of them do in Michigan. Check with your local utility company to see if they offer it.
For example, in southeastern Michigan, the Michigan Public Service Commission put a credit in place for the “power supply components” of the retail rate, not taking transmission rates into account. This means energy sent back to the grid is worth about half the retail value. If you would rather not send excess power generated by your solar panels back to the grid for this reduced rate, installing a battery backup allows you to draw extra energy stored in your battery — energy that you’d otherwise be paying full price for from the grid! The battery backup is also helpful in the event of power outages. That way, you’re still getting value out of excess energy, even if it isn’t monetary value.
Property Tax Exemption
As of 2019, Michigan has a property tax exemption on solar energy installations. This means your valuable solar energy system won’t be considered when your home’s property taxes are being tallied.
Explore The Benefits With Us
Pink Energy’s experts know the ins and outs of solar energy — and our local Detroit-based team has the experience needed to answer your questions about the potential financial benefits of going solar. We’re happy to talk more about tax credits and incentives, so contact us today to learn more about how solar can work for you and your wallet.