Indianapolis, IN Solar Panels

Under Indiana Code § 6-1.1-12-26, any increase in your home’s assessed value caused by a solar installation is fully excluded from your property tax assessment. This exemption applies to all residential and commercial solar systems installed after December 31, 2011, and does not require annual renewal once it is in place.

Because high-efficiency residential solar panels can add $20,000–$30,000 in home value, this exemption can save homeowners in Indianapolis an estimated $124 or more per year at Indiana’s average property tax rate of around 0.75%. Over a 25-year system lifespan, that adds up to roughly $3,100 in cumulative savings — all without reducing the resale value benefit of your solar investment.

To claim the exemption, complete Form 18865 (Renewable Energy Property Tax Deduction) and submit it to your local county auditor’s office after installation. Once approved, the exemption remains in effect for as long as you own the system — no annual paperwork required.

Indiana exempts solar panels, inverters, mounting hardware, and other qualifying solar system components from the state’s 7% sales tax. For a typical residential solar system priced between $33,000 and $45,000, this exemption translates to an immediate upfront savings of approximately $2,300 to $3,200 — automatically applied at the point of sale.

To ensure the exemption is applied correctly, provide your solar equipment seller with a completed Indiana General Sales Tax Exemption Certificate (Form ST-105) at the time of purchase. Unlike a tax credit, there is no waiting for a refund — the savings come off your purchase price directly.

It is worth noting that some online sources suggest the exemption may be limited to certain categories of purchasers (such as utilities or qualifying electricity sellers) depending on how the statute is interpreted. Confirm eligibility with your installer or a tax professional before purchase to ensure you receive the full benefit.

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 net metering to new solar customers. Instead, new installations are enrolled in the Excess Distributed Generation (EDG) program, also called net billing. Under EDG, any surplus solar electricity your system sends 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 electricity rate of 14–17 cents per kWh. For homeowners in Indianapolis served by AES Indiana, the current EDG credit rate is approximately 3.935 cents per kWh.

Systems eligible for EDG must have a maximum capacity of 1 megawatt (MW). Customers who installed solar before Indiana’s 2022 policy change may be grandfathered into the old full-retail net metering rates: systems installed before 2018 retain net metering until July 1, 2047, while systems installed between 2018 and the end of net metering for new customers retain it until July 1, 2032.

Because EDG credits are significantly below retail rates, pairing your solar system with a battery storage system is increasingly recommended to maximize the value of your solar generation by consuming more power on-site.

The PowerSave Indiana Loan Program is offered by the Indiana Energy Independence Fund (IEIF), Indiana’s nonprofit green bank, and provides below-market, unsecured financing for residential solar panels and battery storage systems statewide. Unlike a rebate or tax credit, this program helps homeowners access affordable financing to go solar without needing home equity or a high credit score, making it a valuable tool for those who want to install solar but face upfront cost barriers.

The program is available to Indiana residents statewide, including homeowners in Indianapolis — and can be used for solar PV systems, battery storage, and complementary energy upgrades. Because the loan is unsecured, your home is not used as collateral, which reduces risk for the borrower.

For the most current loan terms, interest rates, and application details, contact the Indiana Office of Energy Development (OED) directly at [email protected] or visit the Indiana OED website. Program terms and availability may change, so it is recommended to confirm current offerings before applying.