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Solar energy is a good option for Hoosiers to create electricity and heat water and air in their homes and businesses. As of January 2015, Indiana has about 101 megawatts (MW) of solar PV installed, most of which is sold to Indiana utilities through purchase power agreements. This map shows Indiana's solar resource potential.
This page features brief explanations of how solar technology works and lists local and federal funding and incentives for solar technologies.
Due to technology costs, solar energy systems usually have large upfront costs which will then be recovered over time as the system lowers your monthly energy bills. This section describes several ways to lower your upfront costs, earn a little money over time, and ulitmately reduce your project's payback period.
Invest in Energy Efficiency First
If you reducing the amount of energy your home or business needs by increasing the efficiency of your appliances and thermal insulation, you will need a smaller solar system and hence will need to spend less money. An energy audit for your building is a good first step.
Loans Geared Towards Solar
Solar loans can help customers avoid high upfront costs and pay for their solar panels over time. Customers who finance their solar panels via loans are still eligible for the federal tax credit. Admirals Bank offers flexible solar loans across the US with terms ranging from 5-20 years. It's possible that local lenders in your area may offer flexible loan terms for solar projects as well. Finally, your solar contractor may be able to connect you to other loan or financing options. Be sure to compare loan terms, origination fees, interest rates, and other important details when comparing loan options.
Net metering progams allow customers who install panels on their property to receive credit on their utility bills for the energy that their solar energy system produces. Meters essentially run backwards to track your energy production and result in lower monthly energy bills. System capacity size must be equal or less than 1 megawatt (MW). The following utilities offer net metering programs that reimburse customers at the retail rate: Duke Energy, Indiana Michigan and Power Company (I&M), Indianapolis Power and Light (IPL), Northern Indiana Public Service Company (NIPSCO), and Vectren. Net metering policies vary amongst municipal utilities and rural electric cooperatives.
Community Solar: Tipmont REMC has built a 240 panel array and allows its customers to lease up to 10 panels, which equals about 4.1 kilowatts total. This program allows customers to pay for the panels over time and receive solar energy without having panels on their home.
Renewable Energy Property Tax Exemption: For any solar thermal, photovoltaic, and other solar energy systems installed after December 31, 2011, the assessed value of the system is exempt from property taxes. Property owners that wish to claim this deduction must fill out Form 18865 and file it with the local county auditor. Questions about this incentive should be directed to the local auditor or assessor. The Department of Local Government Finance outlines the incentive.
Indiana Sales Tax Incentive for Electrical Generating Equipment: equipment, machinery, and tools used in the production of renewable electricity are eligible for this exemption.
Indiana Income Tax Deduction for Solar-Powered Roof Vents or Fans: The amount of the deduction is equivalent to the lesser of either 50% of the installed cost or $1000. For more information, please see Indiana Department of Revenue’s Information Bulletin #105.
The Rural Energy for America Program (REAP) provides grants and loans for energy efficiency and renewable energy projects in rural communities and on farms. Contact your local USDA office for more information.
Business Energy Investment Tax Credit: The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems are eligible. Passive solar systems and solar pool-heating systems are not eligible. This credit falls to 10% of expenditures after 12/31/16. Learn more here.
Residential Renewable Energy Tax Credit: Tax credit of 30% of cost with no upper limit. Applies to solar water heaters and to solar PV systems. Structural improvements to roofs to accommodate solar panels are included in the 30% tax credit. Expiration: December 31, 2016. Learn more here.
Energy-Efficient Mortgages: Homeowners can take advantage of energy efficient mortgages (EEM) to either finance energy efficiency improvements to existing homes, including renewable energy technologies, or to increase their home buying power with the purchase of a new energy efficient home. Learn more here.
Solar Renewable Energy Credits (SRECs)
The solar renewable energy credits (SRECs) trading system allows your solar energy system to earn a small amount of money for each kilowatt-hour (kWh) it produces. Owners of small systems can enter into a long-term contract with third-party aggregators who will then sell SRECs to utilities in states like Ohio. Once a solar energy system is certified and registered, one SREC can be awarded for 1000 killowatt-hours of electricity produced. Large solar producers can opt to sell their credits directly to utilities. OED does not endorse any one SREC third-party aggregator, but some common ones are as follows: SRECTrade, Sol Systems, Midwest Solar Aggregation Group, and Flett Exchange. You can also ask your solar installer which SREC trader he or she recommends.
Check OED's Energy Grant Resources page periodically for grant opportunities that fit Indiana businesses and nonprofits. This grants opportunities are not provided by OED; instead, they come from the local, state, and federal level. Some grants are from private foundations and utilities, while other opportunities are government grants.
The following websites list solar contractors in your area, and some of the sites give user reviews of the contractors' work. Be sure to shop around to get the best price.