Solar Guide

Indiana’s Property Tax Exemption allows homeowners with solar, wind, geothermal, or hydroelectric systems to reduce their annual property taxes by deducting the full assessed value of their renewable energy equipment from their total property assessment. For example, if your solar system adds $5,000 to your property’s assessed value, this exemption removes that $5,000 from your tax calculation, potentially saving you hundreds of dollars each year depending on your local tax rate.

This benefit is available to homeowners, renters (lessees), and those buying property under contract who install qualifying renewable energy devices. The exemption continues automatically each year once approved – you don’t need to reapply annually. To claim this exemption, you must file Form SES/WPD with your county assessor by January 5th (postmark deadline). For geothermal and hydroelectric systems, you’ll also need certification from the Indiana Department of Environmental Management (IDEM) before applying. The exemption begins the year after installation, so if you install solar in 2024, your 2025 property taxes would reflect the reduced assessment.

Indiana’s Sales Tax Exemption is a state tax benefit that allows eligible businesses and organizations to avoid paying Indiana’s sales tax on qualifying purchases, including solar energy equipment. This exemption applies to the state sales tax rate (currently 7%) that would normally be added to the purchase price of solar panels, inverters, batteries, and other solar system components.

To qualify for this exemption, purchasers must be registered with the Indiana Department of Revenue or their home state’s tax authority, and they must complete Form ST-105 (General Sales Tax Exemption Certificate) for each purchase. The exemption is available to registered retail merchants, wholesalers, manufacturers purchasing for resale, contractors working on exempt projects (like government buildings), farmers using equipment for agricultural production, and various other business categories. However, this exemption is specifically not available to nonprofit organizations, and it cannot be used for utilities, vehicles, watercraft, aircraft, or gasoline purchases. Homeowners should note that this exemption is primarily designed for business-to-business transactions rather than direct residential solar purchases, so individual homeowners typically would not qualify unless they meet specific business registration requirements.

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 through a credit system where you receive retail rate credits for the excess solar energy you contribute to the grid. 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 net metering policies can vary by utility company in Indiana, and some utilities may have different compensation rates or program structures. Homeowners should check with their specific utility provider to understand the exact terms, any capacity limits on system size, and whether there are waitlists or application deadlines for participating in their net metering program.