Solar incentives in Indiana

The federal solar investment tax credit (ITC) is the most significant factor reducing the cost of going solar in Indiana. If you install a residential solar panel system by the end of 2032, you will receive a federal income tax credit equal to 30% of the system's total cost — including equipment, labor and permits.

For example, the average system in Indiana costs around $25,460. With the ITC, you can get a $7,638 tax credit on a system with that cost.

The ITC drops to 26% in 2033 and 22% in 2034.

One solar customer, Alann in Hanover, was eligible for a $7,000 federal credit after installing solar panels. The credit is nonrefundable, so it rolls into the next tax year if the credit is more than your tax liability.

“Sure enough, when tax time came, I took that deduction,” Alann told us. “It spans two years because I had enough deductions last year to go over what they allow, and they finished it out this year.”

Remember, you must claim it when you file federal taxes in the year your solar panel system becomes operational. To do this, you have to complete Form 5695.

Residential solar incentives in Indiana

Most of Indiana’s solar incentives are intended for nonresidential use. The state offers a property tax exemption for residents using solar energy systems, though. The program subtracts the property value added by a solar energy system for the purposes of calculating property taxes.

Renewable energy property tax exemption

The renewable energy property tax exemption incentive applies to residential, multifamily residential, commercial, industrial and agricultural sectors. Solar panels, solar water heaters and other renewable energy equipment are eligible. Fill out Form 18865 and file it with the local county auditor to qualify.

What to know about net metering in Indiana

In many states, net metering programs let you sell any extra energy your solar system generates to your local electric company for a credit on your bill. Indiana ended net metering in 2017, however, so you won’t get as much back for power you send to the grid. Talk to your installer about whether you might be better off investing in a solar battery.

Northern Indiana Public Service Company (NIPSCO) offers a feed-in tariff program, which is similar to net metering. You can get roughly 15 cents to 17 cents per kilowatt-hour (kWh). To qualify, your setup must be between 3 kilowatts (kW) and 1 megawatt (MW). It also must be insured and meet all the interconnection standards.

There’s a nonrefundable processing fee you'll have to cover. It's $25 plus an extra dollar for each kW your setup generates. So, if you're going for a 100-kW project, the fee would be $125. Once you're up and running, NIPSCO will send you monthly payments.

» GREENEST STATES: Indiana ranks No. 46

Solar resources in Indiana

Below are additional resources that can guide you through transitioning to solar in Indiana.

• Going Solar in Carmel 
• Going Solar in Gary
• Going Solar in Goshen
• Going Solar in South Bend
• Going Solar in Richmond
• Going Solar in Zionsville
• Hoosiers for Community Solar
• Indian University Environmental Resilience Institute
• NIPSCO renewable energy
• South Central Indiana REMC
• Southern Indiana Power renewable energy
• Indiana Office of Energy Development solar energy facts

» GUIDE: Solar panel installation

Find solar companies in Indiana

Compare popular solar companies available in Indiana below. Read our guide to finding the best solar companies for more.

Bottom line: How much are solar panels in Indiana?

It will cost you around $25,460 on average for solar in Indiana. With the ITC, though, you could see that price drop to $17,822. Even better, after 25 years with your system, you may rack up around $21,994 in savings.

The ConsumerAffairs Research Team conducted an in-depth analysis to determine how much it costs to go solar in Indiana and the average solar costs in other states.

Solar costs: Indiana vs. nearby states