Indianapolis, IN Solar Panels
In This Guide
Solar Power in Indianapolis
If you’re a homeowner in Indianapolis thinking about solar panel installation, you’re in the right place. Indiana electricity prices have risen 16% from 2020 to 2024 — and more residents are looking for ways to take control of their energy costs.
This guide breaks down everything you need to know about solar panels for your home — from how installation works to what you can realistically expect in the Indianapolis area. Let’s make it simple.
How Much Do Solar Panels Cost in Indianapolis, IN?
Using real installation data from Indianapolis and surrounding areas — Carmel, Fishers, Greenwood, and Zionsville — this calculator gives you an honest, localized estimate of what solar installation could cost for your home.
System
- No upfront investment
- Palmetto handles all maintenance
- 90% Production Guarantee
- Comprehensive protection program included
Key Takeaways
- Indianapolis homeowners can save an average of $41,000 over 25 years with solar — and Indiana’s rising electricity rates make the case even stronger.
- Indiana offers a property tax exemption and a sales tax exemption on solar equipment, reducing your upfront costs and ongoing tax burden.
- You can go solar in Indianapolis for as low as $81/month with a lease — no large upfront cost, and Palmetto handles all maintenance.
Indianapolis Electricity Prices
Electricity costs in Indianapolis have been climbing. Here’s what the data shows — and why it matters for homeowners.
Indiana’s electricity rate rose from 13.4 cents per kWh in 2021 to 14.8 cents per kWh in 2024 — roughly a 10.4% increase. Meanwhile, the national average climbed from 13.7 to 16.5 cents per kWh over the same period.
Indianapolis homeowners have fared better than the national average so far, but rates here are still trending upward. Solar panels can help Indiana residents generate their own electricity, reducing how much they depend on the grid each month.
Because solar systems are designed to last 25 years or more, locking in a predictable energy source today helps Indiana homeowners stay insulated from future rate increases — whatever direction utility prices move.
Price of Energy: Indiana vs National Average
Indianapolis Area Utility Providers
In Indianapolis, the primary electricity provider is AES Indiana. Based on 2023 data — the most recent available — AES Indiana’s residential rates ranged from approximately 13.8¢ to 14.0¢ per kWh.
Those 2023 rates sit below both the Indiana state average of 14.9¢ per kWh and the national average of 16.0¢ per kWh — a modest but meaningful difference for Indianapolis homeowners managing monthly energy costs.
Even so, electricity prices have historically trended upward over time. Solar panel installation in Indianapolis can help homeowners lock in more predictable energy costs, reducing exposure to future rate increases from their utility provider.
Indianapolis Utilities Electricity Rates
Indiana Solar Incentives
Indiana homeowners have access to several solar incentives in Indiana that can meaningfully reduce the cost of going solar. Availability varies depending on where you live.
Statewide programs — like Indiana’s property tax exemption and sales tax exemption — apply broadly to Indiana homeowners. Other programs, such as Bloomington’s rebates and NIPSCO’s Feed-In Tariff, are city- or utility-specific and may not apply to Indianapolis residents.
Note that the federal residential solar tax credit is no longer available. For homeowners who lease solar through Palmetto’s LightReach program, Palmetto manages the commercial tax credit and passes those savings through 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 |
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. Residents of Indianapolis can contact their 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. Homeowners in Indianapolis should contact their utility directly to understand the specific EDG credit rate applicable to their account and to complete the interconnection process required before your solar system can be connected to the grid.
Ready to start saving with solar?
Speak with a Palmetto solar expert to find out exactly how much you can save with Indiana incentives.
Get a Free QuoteIndianapolis Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Understanding how seasons affect your solar system helps set realistic expectations for your investment.
Indianapolis gets four distinct seasons, with snowy winters and sunny summers. Despite cloudy stretches, annual sunlight is enough to make solar a smart, productive investment for most homes.
Solar Production in Indianapolis by Month
What Can Your Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average 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 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
Want to know exactly how much solar can power your home?
Get a personalized solar analysis based on your actual home, energy usage, and roof characteristics.
Get My Custom EstimateSolar Panel Systems in Indianapolis
We’ve mapped thousands of solar installations across Indianapolis so you can see just how many of your neighbors have made the switch. Explore the heatmap below to discover which communities and neighborhoods are leading the way to cleaner energy in Indy!
Leasing Solar Panels
Not every Indianapolis homeowner wants to pay tens of thousands of dollars upfront for solar. That’s where Palmetto’s LightReach lease comes in. With a solar lease, you pay a fixed monthly amount — as low as $81/month for a medium-sized home — while Palmetto owns and maintains the system. No large upfront investment, no maintenance responsibilities, and no repair bills.
Compared to a cash purchase, a lease lets you start saving on your electricity bill right away. With a cash purchase, you’re responsible for system upkeep and repairs over the system’s 25+ year life. With LightReach, Palmetto handles all of that — and backs your system with a 90% production guarantee. Palmetto also owns the system commercially, which allows savings from the commercial investment tax credit to be passed directly to you through lower monthly payments.
In Indiana, Palmetto offers the LightReach solar lease as its alternative financing option. Want to understand how leasing compares to buying outright? Read our full breakdown of buying vs. leasing solar to find the right fit for your home and budget.
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 Indianapolis homeowners. Indiana’s electricity rates have risen over 10% since 2021, and Indianapolis homeowners can save an average of $41,000 over 25 years with solar. With 4.6 peak sun hours per day, most homes generate enough power to meaningfully offset their electric bills.
Upfront cost doesn’t have to be a barrier. Palmetto’s LightReach solar lease lets Indianapolis homeowners go solar with no money down, starting at just $81/month — with savings beginning from day one. Indiana also offers a property tax exemption and sales tax exemption on solar equipment, making it even more accessible.
Indianapolis no longer has traditional net metering for new solar installations. Indiana replaced it with 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, not the full retail rate. For AES Indiana customers, that credit is approximately 3.935 cents per kWh, significantly lower than the retail rate you pay.
Homeowners who installed solar before 2018 are grandfathered into full net metering until 2047. If you’re a new solar customer in Indianapolis, your utility will apply the EDG credit rate. Contact AES Indiana directly to confirm your specific credit rate and interconnection requirements.
Yes, solar panels can increase your home value in Indianapolis. According to a Zillow study, homes with solar panels sell for approximately 4.1% more than comparable homes without them. On a $300,000 Indianapolis home, that’s roughly $12,300 in added value.
Indiana’s Solar Property Tax Exemption means the added home value from your solar system is fully exempt from property taxes — so you benefit from the increased value without paying more in taxes. This makes solar a smart long-term investment for Indianapolis homeowners.
The most accessible way to go solar in Indianapolis is through Palmetto’s LightReach lease — with no upfront cost and a fixed monthly payment starting at just $81/month for a medium-sized home. Palmetto owns and maintains the system, and passes commercial tax credit savings directly to you through lower payments.
For homeowners who prefer to own their system outright, a cash purchase is also available. For a typical Indianapolis home, system costs range from $16,744 to $28,075 depending on home size. Note that the federal 30% residential solar tax credit is no longer available following the Big Beautiful Bill. Use the calculator above for a personalized estimate.
For many Indianapolis homeowners, solar can be worth it financially — especially with a lease option. With Palmetto’s LightReach lease, there’s no upfront investment required. Your fixed monthly payment — starting as low as $81/month — is typically less than your current AES Indiana electricity bill, meaning you could start saving from day one.
Over time, the financial case grows stronger. Indianapolis homeowners who purchase solar outright can save an average of $41,000 over 25 years. Indiana’s rising electricity rates make locking in predictable energy costs an increasingly smart financial decision.
Palmetto is a top choice for solar installation in Indianapolis. As a national company with a strong local install network, we’ve served 20,000+ customers across 31 states with an approval rating over 85%. Indianapolis homeowners like Ne Thomas and Jim Martin have shared positive experiences with our seamless installation process and ongoing support.
We offer some of the most flexible financing in the industry, including our LightReach lease — starting at just $81/month with no upfront cost. Palmetto handles all maintenance and backs every system with a 90% production guarantee, making us a reliable, long-term energy partner for Indianapolis homeowners.
With Palmetto’s LightReach lease, Indianapolis homeowners can go solar with no upfront cost. One fixed monthly payment covers the system, installation, monitoring, maintenance, and a 90% Production Guarantee. For a typical 6.38 kW system in Indianapolis, the estimated monthly payment is approximately $81/month.
Because Palmetto owns the system, it qualifies for the commercial Investment Tax Credit (ITC) — and passes those savings to you through lower monthly payments. Since the lease payment is typically less than your current electricity bill, most Indianapolis homeowners start saving from day one.