Indianapolis, IN Solar Panels
Solar Power in Indianapolis
If you live in Indianapolis and your electricity bill keeps climbing, you’re not imagining it. Indiana electricity prices have increased 16% from 2020 to 2024, leaving many Hoosiers looking for a smarter, more predictable way to power their homes. Solar energy can offer exactly that, and understanding how it works here is the first step.
This guide is built for Indianapolis homeowners, walking you through the essentials of home solar panels so you can feel confident about what solar can do for your home and your budget.
How Much Do Solar Panels Cost in Indianapolis, IN?
See what solar really costs in Indianapolis. This calculator uses real installation data from homes across Central Indiana—from Carmel and Fishers to Greenwood and Noblesville—so your estimate reflects your area, not national averages. Get a clear, local look at owning solar and the savings it can bring.
System
Cost
Savings
Key Takeaways
- Indianapolis electricity prices keep climbing, rising about 10% since 2021 to 14.8¢ per kWh—owning solar lets you generate your own power and stabilize costs.
- A typical Indianapolis home saves around $44,000 over 25 years with a solar system, keeping the full utility-bill savings when you own your panels outright.
- Indiana offers valuable solar incentives, including a 100% property tax exemption, a sales tax exemption, and net billing credits for the energy you send back.
Indianapolis Electricity Prices
If your Indianapolis electricity bill keeps climbing, you’re not imagining it. Understanding why is the first step toward taking back control.
Indiana electricity prices have risen roughly 10% since 2021, climbing from 13.4 cents to 14.8 cents per kWh. For many Indianapolis homeowners, those steady increases add up year after year.
Solar offers a way to step off that treadmill. When you own your panels outright, you generate your own power and keep the full savings on your monthly utility bill.
Over time, owning solar helps shield your budget from rising Indiana utility rates. You own the panels, the savings, and any added home value—a lasting benefit for years to come.
Price of Energy: Indiana vs National Average
Indianapolis Area Utility Providers
Most Indianapolis homes get power from AES Indiana or Duke Energy. In 2023, AES Indiana charged about 13.8¢ per kWh and Duke Energy about 14.3¢ per kWh—both below the 16.0¢ national average.
These 2023 rates sit near Indiana’s 14.9¢ state average. Prices stay lower than the national figure partly because the region still relies heavily on affordable coal and natural gas generation for local demand.
Still, Indiana rates have climbed steadily. Solar panel installation in Indianapolis lets you lock in your own energy costs by owning your system, keeping the full utility-bill savings for decades to come.
Indianapolis Utilities Electricity Rates
Indiana Solar Incentives
Going solar in Indianapolis costs less than you might think, thanks to several solar incentives in Indiana that help offset your investment.
Indiana offers a 100% property tax exemption on your system’s added home value, plus a sales tax exemption that trims upfront costs. Net billing credits your excess solar energy back to you.
While the federal residential tax credit no longer applies, these state and local benefits still exist in Indiana and are well worth exploring.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Renewable Energy Property Tax Exemption | Property Tax Exemption | A 100% property tax exemption on the added home value from installing a solar energy system in Indiana. | Learn More |
| Solar Energy Sales Tax Exemption | Sales Tax Exemption | Indiana exempts qualifying solar energy systems from the 7% state sales tax, reducing upfront costs. | Learn More |
| Excess Distributed Generation (EDG) / Net Billing | Net Metering | Indiana’s investor-owned utilities credit excess solar energy at 125% of the avoided-cost rate under the EDG program. | Learn More |
Indiana law (Indiana Code § 6-1.1-12-26) provides a 100% property tax exemption on the increased assessed value that a solar energy system adds to your home. Installing solar typically raises your home’s value, which would normally increase your annual property taxes — but this exemption eliminates that additional tax burden entirely.
The exemption is estimated to save homeowners in Indianapolis roughly $124 or more per year in property taxes, which can add up to approximately $3,100 over a 25-year system lifespan. It applies to both residential and commercial systems.
To claim the exemption, property owners must complete State Form 18865 (Statement for Deduction of Assessed Valuation) and file it with their local county auditor after installation. Once approved, the exemption remains in effect for as long as you own the system and does not require annual renewal.
Indiana exempts qualifying solar energy systems from the state’s 7% sales tax. The exemption applies to solar panels, inverters, racking, wiring, and related components when sold as part of a qualifying solar energy system for residential use.
For a typical residential solar system, this exemption translates to immediate upfront savings of roughly $2,300 to $3,200. On a smaller $28,000 system, the savings would be approximately $1,960 at the point of purchase.
The exemption is typically applied automatically by your installer at the time of sale using the Indiana General Sales Tax Exemption Certificate (Form ST-105). No additional paperwork is required from the homeowner in most cases.
Indiana’s five largest investor-owned utilities — AES Indiana, CenterPoint Energy, Duke Energy Indiana, Indiana Michigan Power (I&M), and NIPSCO — no longer offer traditional retail net metering to new solar customers. In Indianapolis, AES Indiana is the primary electric utility. New installations are enrolled in the Excess Distributed Generation (EDG) program, also known as net billing. Under EDG, surplus electricity sent to the grid earns a bill credit at 125% of the utility’s avoided-cost rate, which typically works out to roughly 3–5 cents per kWh — well below the retail rate of 14–17 cents per kWh. Recent published rates include AES Indiana at about 3.935 cents/kWh and Indiana Michigan Power at roughly 4.6 cents/kWh. Eligible systems must have a maximum capacity of 1 MW.
Customers who installed solar before the end of 2017 keep full retail net metering until July 1, 2047, and those who installed between 2018 and each utility’s transition date keep it until July 1, 2032.
Enrolling in EDG requires an interconnection application and signed agreement with your utility, which your installer typically handles before your system goes live. Indiana’s net metering and EDG policies are governed by the Indiana Utility Regulatory Commission (IURC). Because EDG credits are well below retail rates, pairing solar with battery storage is increasingly recommended to maximize on-site consumption.
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 sees four distinct seasons, with cloudy winters and sunny summers shaping solar output. Despite variable Midwest weather, homes here still capture plenty of sunlight to generate meaningful, year-round energy with the right system.
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 solar installations across the country, right down to the neighborhood. Explore this interactive map to see how many of your Indianapolis neighbors—from Broad Ripple to Fountain Square—have switched to solar. Click any hexagon to discover how your community is embracing clean energy, home by home.
Frequently Asked Questions
Indianapolis no longer offers traditional retail net metering to new solar customers. Instead, new systems enroll in the Excess Distributed Generation (EDG) program, also called net billing, through AES Indiana, the area’s primary utility.
Under EDG, extra electricity you send to the grid earns a credit at 125% of the utility’s avoided-cost rate—roughly 3 to 5 cents per kWh. Because that’s below the retail rate, many Indianapolis homeowners pair solar with battery storage to use more of their own energy.
Yes. In Indianapolis, solar panels can raise your home’s resale value when you own the system outright. A Zillow study found homes with solar sell for roughly 4.1% more than comparable homes without it.
Because you own the panels, that added value belongs to you. Indiana also offers a 100% property tax exemption, so the added home value won’t raise your property taxes.
In Indianapolis, a typical home solar system costs around $21,500 installed, or roughly $3.16 per watt, when you purchase the system outright. Smaller and larger homes generally range from about $16,900 to $27,500, depending on system size and energy needs.
The federal 30% residential tax credit was eliminated by the 2025 federal law change, so it no longer applies. Indiana’s property and sales tax exemptions may still help. Use the cost calculator above for pricing specific to your home.
For many Indianapolis homeowners, owning solar can be worth it financially. When you buy your system outright, you keep the full savings from every kWh your panels produce, helping offset rising Indiana utility rates that now average 14.8¢ per kWh.
A typical Indianapolis home reaches its payback point in about 14 years and saves roughly $44,000 over 25 years. You also own the panels and any added home value, making it a lasting asset.
Solar panels are low maintenance. With no moving parts, there’s very little that can wear out. For most Indianapolis homes, an occasional visual inspection to check for debris, along with the natural rinsing from Indiana’s rain and snow, is enough to keep them producing efficiently.
Your system is also backed by manufacturer warranties on both the panels and the inverter, giving you long-term peace of mind and protection for your investment.
Indianapolis homeowners can take advantage of several state and local solar incentives. Indiana offers a 100% property tax exemption on the added home value from your system, plus a sales tax exemption on qualifying equipment, which lowers your upfront costs.
You can also earn credits for extra energy through Excess Distributed Generation (net billing). Note that the federal 30% residential tax credit is no longer available following the 2025 federal law change.