Indianapolis, IN Solar Panels
In This Guide
Solar Power in Indianapolis
If you’re a homeowner in Indianapolis wondering whether solar is worth it, you’re asking the right question. Indiana electricity prices rose 16% from 2020 to 2024 — and many residents are now looking for smarter, more stable ways to power their homes.
This guide walks you through everything you need to know about solar panel installation for your home — from how the process works to what it actually costs in Indianapolis. Let’s break it down in plain terms.
How Much Do Solar Panels Cost in Indianapolis, IN?
Using real installation data from Indianapolis and surrounding areas — Carmel, Fishers, Greenwood, and beyond — this calculator gives you an honest, localized estimate of what solar panels could cost for your home.
System
- No upfront investment
- Palmetto handles all maintenance
- 90% Production Guarantee
- Comprehensive protection program included
Key Takeaways
- Indianapolis electricity prices rose 10% in just 3 years — solar helps homeowners lock in more stable energy costs and reduce grid dependence.
- A typical Indianapolis home can save around $41,000 over 25 years with solar, plus benefit from Indiana’s property tax and sales tax exemptions.
- No upfront cost? No problem. Palmetto’s LightReach lease lets Indianapolis homeowners go solar for as low as $81/month with no maintenance responsibilities.
Indianapolis Electricity Prices
Electricity costs in Indianapolis have been climbing. Understanding what you’re paying — and why — is the first step.
Indiana electricity rates rose from 13.4 cents per kWh in 2021 to 14.8 cents per kWh in 2024 — roughly a 10% increase in just three years. Nationally, rates climbed even faster, up nearly 20% over the same period.
Solar can help Indianapolis homeowners reduce their dependence on the grid. By generating your own electricity, you’re less exposed to rate increases that are largely outside your control.
Over a 25-year system lifespan, locking in a more stable energy cost can add up to significant savings. For many Indianapolis homeowners, solar isn’t just clean energy — it’s a long-term financial decision.
Price of Energy: Indiana vs National Average
Indianapolis Area Utility Providers
Based on the most recent 2023 data available, AES Indiana — the primary utility serving Indianapolis — charged 13.8¢ per kWh. That sits below both the 2023 Indiana state average of 14.90¢ and the national average of 16.0¢.
AES Indiana’s relatively lower rate reflects Indiana’s regional energy mix, historically anchored in coal and now transitioning toward natural gas and renewables. This keeps Indianapolis electricity rates competitive compared to national averages, though rates can shift as the grid evolves.
Even at today’s rates, homeowners who generate their own electricity through solar are less exposed to future AES Indiana electricity cost increases — providing a more predictable energy cost over time.
Indianapolis Utilities Electricity Rates
Indiana Solar Incentives
Indianapolis homeowners have access to several solar incentives in Indiana — including property tax exemptions, sales tax savings, and a net billing program — that can meaningfully reduce the cost of going solar.
Indiana’s statewide incentives include a 100% property tax exemption on added home value, a 7% sales tax exemption on solar equipment, and the Excess Distributed Generation (EDG) net billing program, which credits surplus energy sent to the grid. Some cities, like Bloomington, offer additional local rebates not available statewide.
Note that the federal 30% residential solar tax credit has been eliminated by the Big Beautiful Bill. State incentives still apply. Homeowners exploring solar leasing through LightReach may find the incentive landscape simpler — Palmetto handles the commercial tax credit and passes savings through via lower monthly payments.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Indiana Solar Property Tax Exemption | Property Tax Exemption | Indiana provides a 100% property tax exemption on the added home value resulting from a solar energy system installation, saving homeowners an estimated $124 per year. | Learn More |
| Indiana Solar Sales Tax Exemption | Sales Tax Exemption | Indiana exempts residential solar energy system components — including panels, racking, and inverters — from the state’s 7% sales tax, saving homeowners roughly $2,000–$3,200 upfront. | Learn More |
| Indiana Excess Distributed Generation (EDG) Program — Net Billing | Net Metering | Indiana’s Excess Distributed Generation (EDG) program credits solar customers for surplus electricity sent to the grid at a rate equal to 125% of the avoided cost rate, replacing traditional net metering for new solar customers. | Learn More |
Indiana Code § 6-1.1-12-26 guarantees that any increase in your home’s assessed value due to a solar installation is completely excluded from your property tax assessment. This means you can enjoy the full financial and energy benefits of going solar without paying a single dollar more in property taxes — regardless of how much value the system adds to your home. On average, Indiana homeowners save an estimated $124 per year through this exemption.
The exemption applies to all residential and commercial solar energy systems installed after December 31, 2011. To claim it, property owners must complete Form 18865 (Renewable Energy Property Tax Deduction) and submit it to their local county auditor’s office. The exemption does not require annual renewal once approved.
This incentive is available statewide and can be combined with Indiana’s sales tax exemption and any applicable local rebate programs. Residents of Indianapolis should contact the Marion County auditor’s office to confirm filing deadlines and any county-specific requirements before or shortly after your installation.
Indiana exempts qualifying solar energy equipment from the state’s 7% sales tax at the point of purchase. Exempt components typically include solar modules (panels), racking systems, and inverters — the core hardware directly involved in generating electricity. On a typical residential solar installation costing $28,000–$45,000, this exemption can save homeowners between approximately $2,000 and $3,200 instantly, with no post-purchase application required.
To take advantage of this exemption, you or your solar installer must provide the equipment seller with a properly completed Indiana General Sales Tax Exemption Certificate (Form ST-105) at the time of purchase. Most reputable solar installers in Indiana are familiar with this process and can handle the paperwork on your behalf.
This exemption is available statewide to all Indiana homeowners purchasing a qualifying solar energy system and can be combined with the property tax exemption and any applicable local rebate programs. There is no income limit or application window — the savings are realized immediately at the time of sale.
Indiana no longer offers traditional net metering for new solar customers. Instead, the state has transitioned to the Excess Distributed Generation (EDG) program. Under EDG, when your solar panels produce more electricity than your home uses, the surplus energy is sent to the grid and you receive a bill credit. For customers of the five major investor-owned utilities — AES Indiana, CenterPoint Energy, Duke Energy Indiana, Indiana Michigan Power (I&M), and NIPSCO — the credit rate is set at 125% of the avoided cost rate, which is typically well below the retail electricity rate. For example, AES Indiana’s current EDG credit rate is approximately 3.935 cents per kWh. AES Indiana is the primary utility serving Indianapolis homeowners.
Customers of municipal electric utilities or rural electric member cooperatives (REMCs) may have different EDG credit rates, which vary by provider. You should contact your specific utility directly to confirm the current rate. Homeowners who installed solar before 2018 are grandfathered into full net metering until July 1, 2047, and systems installed between 2018 and the transition period retain full net metering until July 1, 2032.
Because EDG credit rates are significantly lower than retail electricity rates, maximizing your own solar consumption (self-consumption) is especially important in Indiana. Pairing solar with battery storage can help you use more of your generated power directly, reducing your reliance on lower-value grid credits. Contact your utility provider directly for your specific EDG rate and enrollment details.
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 cold winters and sunny summers. Despite cloudy stretches, the city receives enough annual sunlight for solar panels to perform remarkably well year-round.
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 already made the switch. Explore the heatmap below to discover which communities and neighborhoods in Indianapolis are leading the way in solar adoption!
Leasing Solar Panels
Not everyone wants to pay tens of thousands of dollars upfront for solar panels — and that’s completely understandable. Palmetto offers a solar lease option in Indiana called LightReach, which lets Indianapolis homeowners go solar with no upfront cost.
With a solar lease, you pay a fixed monthly amount — for example, as low as $81/month for a medium-sized home in Indianapolis — while Palmetto owns and maintains the system. That means no repair bills, no monitoring headaches, and no worrying about system performance. If something isn’t working right, that’s Palmetto’s responsibility, not yours. Compare that to a cash purchase, where you’re responsible for all maintenance costs after installation. You can learn more about the differences between buying and leasing solar here.
In Indiana, Palmetto offers a solar lease through LightReach. Because Palmetto owns the system, it qualifies for the commercial Investment Tax Credit — and those savings are passed directly to you through lower monthly payments. For many Indianapolis homeowners, leasing is simply the more practical path to solar: predictable monthly costs, no maintenance burden, and a 90% production guarantee built in.
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!
Explore LightReach LeasingFrequently Asked Questions
Yes, solar makes sense for many Indianapolis homeowners. Indiana electricity rates have risen 10% in just three years, and a typical home can save around $41,000 over 25 years with solar. Indianapolis also receives an average of 4.6 peak sun hours per day — enough for strong year-round production.
If upfront cost is a concern, Palmetto’s LightReach solar lease removes that barrier entirely. Indianapolis homeowners can go solar with no money down and start saving from day one, with payments as low as $81/month for a medium-sized home.
Indianapolis does not have traditional net metering. Indiana has replaced it with the Excess Distributed Generation (EDG) program. Under EDG, when your solar panels produce more electricity than your home uses, the surplus is sent to the grid and you receive a bill credit.
For AES Indiana customers — the primary utility serving Indianapolis — that credit rate is approximately 3.935 cents per kWh, which is significantly lower than the retail electricity rate. This makes maximizing your own solar consumption especially important for Indianapolis homeowners.
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. For the median Indianapolis home, that could translate to thousands of dollars in added value.
Indiana also offers a 100% property tax exemption on the added home value from solar, meaning Indianapolis homeowners can enjoy the increased value without paying higher property taxes.
With Palmetto’s LightReach lease, Indianapolis homeowners can go solar for as low as $81/month with no upfront cost — Palmetto owns and maintains the system. It’s the most accessible way to go solar today.
For a cash purchase, a typical medium-sized Indianapolis home requires a 6.38 kW system costing around $20,340. Note that the federal 30% residential tax credit is no longer available following the Big Beautiful Bill. Use the calculator above for a personalized estimate.
For Indianapolis homeowners, solar can make strong financial sense — especially with a lease option. With Palmetto’s LightReach lease, there is no upfront investment required. Your monthly lease payment is typically lower than your current electricity bill, meaning you start saving from day one.
Indiana electricity rates have risen 10% in just three years, making energy costs less predictable. Leasing solar locks in a fixed monthly payment as low as $81/month, helping Indianapolis homeowners reduce grid dependence and stabilize their energy costs over time.
Palmetto Solar is a top choice for Indianapolis homeowners. We are a national company with a strong local install network, serving 20,000+ customers across 31 states with an approval rating over 85%. Real Indianapolis customers like Ne Thomas and Jim Martin have shared positive experiences with our installation process and savings.
We also offer some of the best financing options available, including our LightReach lease — starting as low as $81/month with no upfront cost. We handle all maintenance, include a 90% production guarantee, and pass commercial tax credit savings directly to you through lower monthly payments.
With Palmetto’s LightReach lease, Indianapolis homeowners can go solar with no upfront cost. LightReach is an all-inclusive program — one 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 — and those savings are passed directly to you through lower monthly payments. For most Indianapolis homeowners, the lease payment is less than their current electricity bill, so savings begin immediately.