Solar Guide

Indiana’s Property Tax Exemption for renewable energy systems allows homeowners to reduce their annual property taxes by deducting the full value of their solar, wind, geothermal, or hydroelectric equipment from their property’s assessed value. This means if you install a $5,000 solar system on a home assessed at $200,000, your taxable property 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 contract buyers who install qualifying renewable energy devices. The benefit continues automatically each year once approved – you don’t need to reapply annually. To qualify, you must file Form SES/WPD with your county assessor by January 5th of the year following installation. For geothermal and hydroelectric systems, you’ll also need certification from the Indiana Department of Environmental Management (IDEM). Multiple renewable energy systems on the same property can each qualify for their own separate deduction, maximizing your tax savings.

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 under specific categories, such as being a registered retail merchant purchasing for resale, a manufacturer buying equipment for direct production, or a contractor working on exempt projects like government buildings.

The financial benefit equals the full amount of Indiana’s state sales tax that would normally be charged on solar equipment purchases. While the exact percentage isn’t specified in this form, this exemption can result in significant savings on large solar installations. The exemption also covers county innkeeper’s tax and local food and beverage tax when applicable.

To qualify, purchasers must be registered with the Indiana Department of Revenue or their home state’s tax authority, and they must fit into one of the approved exemption categories listed on the form. The exemption cannot be used for utilities, vehicles, watercraft, aircraft, or gasoline, and nonprofit organizations cannot use this particular certificate. All five sections of the form must be completed correctly, or the seller is required to collect the sales tax.

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 normally pay for electricity. These credits can then 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 credit rates or monthly fees that could affect your overall savings.

Eligibility typically requires that your solar system meets your utility’s interconnection standards and doesn’t exceed certain size limits, which are usually based on your home’s historical energy usage. Most residential systems qualify without issue, but you’ll need to complete an interconnection application with your utility company before your system can be connected to the grid. There are currently no statewide deadlines for net metering in Indiana, but individual utility companies may have their own policies or capacity limits that could change over time, so it’s worth checking with your specific utility provider about their current net metering availability and terms.