Indiana

Indiana’s Property Tax Exemption for renewable energy systems allows homeowners to reduce their annual property taxes by deducting the full assessed value of their solar, wind, geothermal, or hydroelectric equipment from their property’s total assessed value. This means if you install a $5,000 solar system on a home assessed at $200,000, your taxable assessed value drops to $195,000, resulting in lower property tax bills each year for as long as you own the system.

This deduction is available to homeowners, renters (lessees), and buyers purchasing property under contract. The benefit continues automatically each year once approved – you don’t need to reapply annually. Geothermal and hydroelectric systems require certification from the Indiana Department of Environmental Management (IDEM) before qualifying. Applications must be filed by January 5th each year using Form SES/WPD, and can be submitted by email, in-person, or regular mail (postmark deadline applies). Property owners who purchase homes as late as December 31st are still eligible to apply for the following year’s tax deduction.

Indiana’s Sales Tax Exemption allows certain businesses and organizations to purchase solar equipment without paying the state’s sales tax. This is a general business tax exemption form that can be used for solar purchases when the buyer qualifies for one of the specific exemption categories outlined in Indiana tax code.

The financial benefit equals the amount of Indiana sales tax you would otherwise pay on your solar equipment purchase. While the exact savings depend on your purchase amount and local tax rates, this exemption can reduce your upfront solar costs by eliminating the sales tax portion of your investment.

To qualify, you must be a registered business with either an Indiana Taxpayer Identification Number (TID) or a valid business license from another state. The exemption applies to specific categories including sales for resale, manufacturing equipment, public transportation companies, farmers purchasing agricultural equipment, contractors working on exempt projects, government entities, and federal agencies. Homeowners purchasing solar for personal residential use would not typically qualify for this business-focused exemption.

There are no specific deadlines mentioned, but you must complete all sections of Form ST-105 at the time of purchase. Important limitations include that this exemption cannot be used for utilities, vehicles, watercraft, aircraft, or gasoline purchases, and nonprofit organizations cannot use this particular form.

Net metering in Indiana is a billing arrangement that allows homeowners with solar panels to receive credit for excess electricity they generate and send back to the electric grid. When your solar system produces more power than your home uses during sunny periods, that extra energy flows to the grid and your electric meter essentially runs backward, creating credits on your utility bill.

The financial benefit works like a one-to-one credit system – for every kilowatt-hour (kWh) of excess solar energy you send to the grid, you receive a credit equal to the retail rate you would normally pay for electricity from your utility company. These credits can then be used to offset the electricity you draw from the grid when your solar panels aren’t producing enough power, such as at night or during cloudy days. However, it’s important to note that Indiana’s net metering policies can vary by utility company, and some utilities may have different compensation rates or structures for excess solar generation. Homeowners should check with their specific utility provider to understand the exact terms and any capacity limits that may apply to their solar installation.