Indiana Solar Panels
Solar in Indiana
Indiana electricity prices increased 16% from 2020 to 2024, and many homeowners are looking for ways to take control of their energy costs. Solar panels for your home are one of the most effective ways to do that — and Palmetto is here to help.
This guide covers everything Indiana homeowners need to know about solar installation — from how it works to what it costs — in plain, simple terms.
Indiana Solar Panel Cost
Wondering what solar actually costs in Indiana? Our calculator uses real Palmetto installation data from cities across the state — Indianapolis, Fort Wayne, Evansville, and more — to show you personalized numbers. See your estimated monthly lease payment through our LightReach program (no upfront cost) or explore a cash purchase option. Both views, real local data.
System
- No upfront investment
- Palmetto handles all maintenance
- 90% Production Guarantee
- Comprehensive protection program included
Key Takeaways
- Indiana electricity rates have risen 10% since 2021, and solar panels are one of the most effective ways to take control of your energy costs.
- Indiana homeowners can lease solar for as low as $109/month with no upfront cost through Palmetto’s LightReach program — Palmetto owns and maintains the system.
- Indiana offers a 100% property tax exemption and 7% sales tax exemption on solar equipment, helping reduce the overall cost of going solar.
Looking for More Detailed Indiana City Guides?
Explore our comprehensive solar guides for major cities across Indiana to find location-specific information on incentives, installers, and solar potential.
Bloomington, IN
Bloomington, IN
Bloomington, IN
Evansville, IN
Evansville, IN
Evansville, IN
Fort Wayne, IN
Fort Wayne, IN
Fort Wayne, IN
Indianapolis, IN
Indianapolis, IN
Indianapolis, IN
South Bend, IN
South Bend, IN
South Bend, IN
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Learn MoreIndiana Electricity Prices
Indiana electricity rates have been climbing for years — and that trend shows no signs of slowing down.
Indiana’s average electricity rate rose from 13.4¢ per kWh in 2021 to 14.8¢ in 2024 — about a 10% increase in three years. The national average climbed even faster, hitting 16.5¢ per kWh in 2024.
Solar panels can offset a meaningful portion of the electricity you draw from the grid. The more energy you generate at home, the less exposed you are to utility rate increases outside your control.
With Palmetto’s LightReach program, homeowners can go solar with no upfront cost, lock in a fixed monthly rate, and let Palmetto own and maintain the system — so rising utility prices don’t catch you off guard.
Price of Energy: Indiana vs National Average
Indiana Area Utility Providers
Indiana has five major electric utilities — AES Indiana, Duke Energy Indiana, NIPSCO, Vectren, and Indiana Michigan Power. Based on 2023 data, their rates range from 13.8¢ to 17.9¢ per kWh, compared to a national average of 16.0¢.
Indiana’s state average of 14.9¢ per kWh falls below the national average, largely due to the state’s reliance on coal and natural gas. However, NIPSCO and Vectren customers pay above the national average at 17.9¢ and 17.2¢ respectively.
Generating your own solar energy means buying less electricity from your utility. So when rates rise, the impact on your bill is smaller — one reason many Indiana homeowners are looking into solar.
Indiana Utilities Electricity Rates
Indiana Solar Incentives
Indiana homeowners can access several solar incentives in Indiana — including state tax exemptions and local utility programs — that help lower the overall cost of going solar.
At the state level, Indiana offers a full property tax exemption on solar-added home value and a 7% sales tax exemption on solar equipment. Cities like Bloomington provide additional rebates and grants for eligible homeowners and organizations.
State and local incentives still apply to new solar installations. With a LightReach lease, Palmetto handles the commercial tax credit and passes those savings through as lower monthly payments.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Indiana Solar Property Tax Exemption | Property Tax Exemption | Indiana homeowners with solar installations are 100% exempt from paying additional property taxes on the added home value from their solar energy system. | Learn More |
| Indiana Solar Sales Tax Exemption | Sales Tax Exemption | Indiana exempts solar energy equipment — including panels, racking, and inverters — from the state’s 7% sales tax, saving homeowners thousands of dollars upfront. | Learn More |
| Indiana Excess Distributed Generation (EDG) — Net Billing Policy | Net Metering | Indiana’s Excess Distributed Generation (EDG) policy allows solar homeowners to receive bill credits for surplus electricity sent to the grid, replacing the former net metering program for new installations. | Learn More |
| NIPSCO Feed-In Tariff (Northern Indiana) | Feed-In Tariff | NIPSCO’s Feed-In Tariff program offered eligible Northern Indiana customers above-market rates for solar electricity generated, though the program is currently closed to new applicants. | Learn More |
| City of Bloomington Green Home Improvement Program (BGHIP) | Rebate | The City of Bloomington offers rebates to residential homeowners for solar panel installations and battery energy storage systems through the Green Home Improvement Program. | Learn More |
| City of Bloomington SEEL Program (Solar, Energy Efficiency & Lighting) | Rebate | The City of Bloomington’s SEEL Program provides grant funding for nonprofits, community organizations, and small businesses to install solar panels and battery storage systems. | Learn More |
Indiana’s Renewable Energy Property Tax Exemption ensures that the increased home value resulting from a solar installation is completely excluded from your property tax assessment. For any solar system installed after December 31, 2011, the assessed value of the system is fully exempt — meaning you won’t pay a single extra dollar in property taxes because of your solar panels. On average, this saves Indiana homeowners an estimated $124 per year.
The exemption applies to solar, wind, geothermal, and hydroelectric devices. It is available to property owners (not renters), but does cover mobile homes and other types of residences fitted with solar energy systems. To claim the exemption, property owners must complete Form 18865 and submit it to their local county auditor’s office.
This is a permanent, ongoing benefit — once approved, you continue to receive the exemption each year without reapplying. Contact your local county auditor or assessor to confirm eligibility and obtain the necessary forms.
When you purchase a solar energy system in Indiana, the major components — including solar modules, racking hardware, and inverters — are exempt from Indiana’s 7% state sales tax under the state’s sales tax exemption for electrical generating equipment. On a typical $28,000 solar installation, this exemption saves homeowners nearly $2,000 instantly at the point of purchase.
To take advantage of this exemption, you (or your solar installer) must provide the seller with a properly completed Indiana General Sales Tax Exemption Certificate (Form ST-105) at the time of purchase. This is a straightforward process that most reputable solar installers are familiar with and can assist you with.
This exemption applies automatically to qualifying solar equipment and requires no post-purchase application or approval. It is one of Indiana’s most accessible and immediate solar financial benefits, reducing your out-of-pocket installation cost from day one.
Indiana replaced traditional net metering with the Excess Distributed Generation (EDG) program for new solar customers. Under EDG, when your solar panels produce more electricity than your home uses, the surplus is sent to the grid and you receive a credit on your utility bill. However, unlike true net metering, the credit rate is based on the average wholesale price of electricity for the prior year plus 25% — which is significantly lower than the retail rate you pay for electricity. For example, AES Indiana’s current EDG credit rate is approximately 3.935 cents per kWh sent back to the grid.
Customers who installed solar systems before 2018 are grandfathered into full net metering until July 1, 2047. Systems installed between 2018 and the end of the net metering era for new customers receive full net metering until July 1, 2032. All new solar installations after that transition period are subject to the EDG rate. As of 2022, utility companies in Indiana are no longer required to offer true net metering for new solar installations.
The EDG program is administered through your individual utility provider — including AES Indiana, electric co-ops, and municipal utilities. Contact your utility directly to understand the specific EDG credit rate applicable to your account and to complete the interconnection process required before your solar system can be connected to the grid.
Northern Indiana Public Service Company (NIPSCO) offered a Feed-In Tariff (FIT) program that allowed residential solar customers to earn credits for electricity their systems generate — regardless of whether that energy was used on-site or exported to the grid. This program functioned similarly to Solar Renewable Energy Certificates (SRECs) offered in other states. Solar systems between 5 kW and 10 kW earned between $0.15 and $0.17 per kWh generated, while systems above 10 kW earned between $0.13 and $0.15 per kWh.
Important: As of the latest available information, the NIPSCO Feed-In Tariff program is closed to new applicants. Existing enrolled customers continue to receive their contracted rates. There is no application fee for Level 1 systems (up to 10 kW); Level 2 applications (greater than 10 kW up to 2 MW) carried a non-refundable fee of $50 plus $1.00 per kW.
NIPSCO customers who are not enrolled in the FIT program are instead subject to the standard EDG (Excess Distributed Generation) net billing policy. NIPSCO’s EDG rate is approximately $0.12 per kWh for solar systems between 5 kW and 10 kW sent to the grid. Check the NIPSCO website or contact them directly for the most current program availability and rates.
The Bloomington Green Home Improvement Program (BGHIP) provides rebates to City of Bloomington homeowners who install solar panels and/or battery energy storage systems. One rebate is allowed per household per year, with a special exception: a simultaneous installation of solar panels and a battery energy storage system qualifies for both rebates at the same time. An additional electrical panel upgrade add-on rebate is also available if a qualifying solar or battery project requires increased electrical capacity — though this add-on cannot be claimed as a stand-alone rebate.
Applications must be submitted before starting home improvements to ensure funding is available. After submitting a project quote and receiving pre-approval, applicants have 60 days to submit proof of a paid deposit from their contractor along with a completed W9/EFT form. This pre-approval step is critical — starting work before approval may disqualify your project.
BGHIP rebates can be combined with state and utility rebates, as long as the total of all rebates and tax credits does not exceed the total project cost. This makes BGHIP a valuable complement to Indiana’s property and sales tax exemptions for Bloomington residents. Visit the official program website or contact the City of Bloomington’s Office of Sustainability for current rebate amounts and program details.
The City of Bloomington’s SEEL (Solar, Energy Efficiency & Lighting) Program offers grant funding and technical assistance to nonprofits, community organizations, and small businesses looking to install solar panels or battery energy storage systems. This program is specifically designed for non-residential applicants and is not available to individual homeowners. Grant amounts include up to $25,000 for a solar PV system installation, up to $20,000 for a battery energy storage system (nonprofits only), or a combined $45,000 for a simultaneous solar and battery installation (nonprofits only).
Applications are accepted on a rolling basis until all program-year funding is allocated or a set deadline is reached. Eligible applicants include nonprofits, community organizations, and small businesses located within the City of Bloomington. The program provides both financial support and technical guidance to help organizations navigate the solar installation process.
If you represent a qualifying organization in Bloomington, this program can dramatically reduce the upfront cost of going solar. Visit the official SEEL program page at the City of Bloomington’s website for current funding availability, eligibility requirements, and application instructions.
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Get a Free QuoteIndiana Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Indiana’s mix of snowy winters and sunny summers shapes solar production year-round. Despite cloudy stretches, Indiana receives enough sunlight to make solar a smart, worthwhile investment for most homeowners.
What Can the Average Indiana Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average Indiana homes (15 kWh/day per home)
- or Run central AC for 18 hours AND power all other appliances
- or Fully charge 5.4 Tesla Model 3 electric vehicles
Winter Production (December)
In December, your 10 kW system could power:
- 2 average Indiana homes (15 kWh/day per home)
- or Keep your home heating system running for 15 hours
- or Fully charge 3 Tesla Model 3 electric vehicles
Annual Production
Over a year, your 10 kW system could:
- Offset 10 tons of carbon dioxide emissions
- or Equal the environmental benefit of planting 175 trees
- or Save approximately $4,234 in electricity costs
See how affordable solar leasing can be for your home
Get a personalized LightReach quote based on your home, energy usage, and roof — no upfront cost required.
Get My Custom EstimateSolar Installations in Indiana
We’ve mapped thousands of real solar installations across Indiana so you can see just how many of your neighbors have already made the switch. Explore the heatmap below to discover which communities are leading Indiana’s solar movement — your street might be closer to going solar than you think!
Go Solar with LightReach — No Upfront Cost
For Indiana homeowners, Palmetto’s LightReach energy plan offers a solar lease — meaning you pay a simple, fixed monthly amount (as low as $109/mo) with no upfront cost. Palmetto owns and maintains the system entirely, so you never have to worry about repairs, performance issues, or unexpected expenses.
Unlike a cash purchase — where you’re responsible for maintenance and recouping your investment over time — a LightReach lease puts everything in Palmetto’s hands. That includes detailed system design, premium black solar panels, a high-efficiency inverter, permitting, installation, and ongoing service. If your system doesn’t meet Palmetto’s 90% Production Guarantee, you’ll receive a credit for the difference.
With the federal residential solar tax credit no longer available for cash purchases, leasing is now the most accessible and affordable path to solar for most Indiana homeowners. Learn more about the differences between buying and leasing solar to decide what’s right for your home.
Go solar without the investment
With LightReach, there are no investment costs to recoup, loan payments to manage, or maintenance needs to take on. As soon as your panels are active, your solar savings are too!
Learn MoreFrequently Asked Questions
Yes, solar makes sense for many Indiana homeowners. Indiana averages 4.6 peak sun hours per day, electricity rates have risen 10% since 2021, and the state offers a 100% property tax exemption and 7% sales tax exemption on solar equipment — helping reduce overall costs.
The biggest barrier to going solar has traditionally been upfront cost. Palmetto’s LightReach lease removes that barrier entirely — Indiana homeowners can go solar for as low as $109/month with no upfront cost. Palmetto owns and maintains the system and includes a 90% Production Guarantee.
Indiana no longer offers traditional net metering for new solar customers. It has been replaced by the Excess Distributed Generation (EDG) program. Under EDG, surplus electricity your panels send to the grid earns a bill credit — but at a wholesale-based rate (plus 25%), not the full retail rate. For example, AES Indiana’s current EDG credit rate is approximately 3.935 cents per kWh.
Homeowners who installed solar before 2018 are grandfathered into full net metering until July 1, 2047. Systems installed between 2018 and the transition period receive full net metering until July 1, 2032. All new installations are subject to the EDG rate. Contact your Indiana utility provider — such as AES Indiana, NIPSCO, or Duke Energy Indiana — for your specific credit rate.
Yes, solar panels can increase your home value in Indiana. A Zillow study found that homes with solar panels sell for approximately 4.1% more than comparable homes without them. For a median-priced Indiana home, that could mean thousands of dollars in added value.
Even better, Indiana’s 100% property tax exemption means you won’t pay additional property taxes on that increased value — so you get the financial upside without the tax burden. Note that this home value benefit typically applies to owned systems, not leased systems like Palmetto’s LightReach program, since the homeowner does not own the panels.
For most Indiana homeowners, the most accessible way to go solar is through Palmetto’s LightReach lease — with payments as low as $109/month and no upfront cost. Palmetto owns and maintains the system, includes a 90% Production Guarantee, and provides a comprehensive protection program.
For those preferring a cash purchase, an average Indiana system (8.51 kW) costs approximately $25,475. Note that following the 2025 Big Beautiful Bill, the federal 30% tax credit is no longer available for residential cash purchases. Use the calculator above for personalized pricing.
For most Indiana homeowners, solar is financially worthwhile — especially through leasing. With Palmetto’s LightReach program, you start saving from day one with no upfront investment and a fixed monthly payment as low as $109/month. Palmetto owns and maintains the system and backs it with a 90% Production Guarantee.
A cash purchase remains an option — an average Indiana system costs around $25,475 with an estimated $55,000 in 25-year savings. However, following the 2025 Big Beautiful Bill, the federal 30% residential solar tax credit has been eliminated for cash purchases, making leasing the most accessible path for most Indiana homeowners.
Palmetto Solar is a top choice for Indiana homeowners. We’re a national company with a strong local install network serving cities like Indianapolis, Fort Wayne, Evansville, and South Bend. We’ve helped 20,000+ customers across 31 states make the switch to solar.
For Indiana homeowners, our LightReach lease is the most accessible option — no upfront cost, a fixed monthly payment as low as $109/month, and we handle all maintenance. Every LightReach system includes a 90% Production Guarantee and a comprehensive protection program.
With Palmetto’s LightReach solar lease, Indiana homeowners pay one simple monthly payment that covers everything — the system, installation, monitoring, maintenance, and a 90% Production Guarantee. There is no upfront cost. For a typical 8.51 kW system in Indiana, the estimated monthly lease payment is approximately $109/month.
Because Palmetto owns the system, it claims the commercial Investment Tax Credit (ITC) and passes those savings to you through lower monthly payments — an advantage cash buyers no longer have following the 2025 Big Beautiful Bill. Most Indiana homeowners start saving from day one, since the lease payment is typically less than their current electricity bill.