Indiana Solar Power Rebates, Tax Credits, and Incentives

Solar Legislator Score:
STATE SOLAR LEGISLATION
The Indiana General Assembly wrapped up its 2007 legislative session on April 31 with some unfinished business. State Bill 2006 would have adopted a Renewable Electricity Standard (RES) requiring Indiana to obtain 10% of its electricity from renewable sources, but died because the House and Senate couldn’t reach an agreement on certain language in the bill. Other recent legislative action promoting solar power has been conspicuous by its absence. This, plus a comparative lack of current solar energy incentives, earns a “poor” rating for the state of Indiana.
STATE INCENTIVE PROGRAMS, UTILITY REBATES, UTILITY LOANS, AND UTILITY INCENTIVES

A state property tax exemption allowing an annual deduction against property tax valuations is one of the few solar incentives offered to residents of Indiana. Individual statutes cover solar, wind, hydro power, and geothermal systems. The property tax exemption applying to solar installations used for heating or cooling has been in effect since 1975. It broadly covers the entire system, including equipment for storage and distribution, and solar power installations attached to mobile homes. Specifics are available here.

From the Indiana Office of Energy & Defense Development, non-residential entities are eligible for grant funding. These are available to Indiana’s public, non-profit, and business sectors under the state’s Alternative Power and Energy (APE) Grant Program, which is supported by an annual budget of $300,000. 50% of the project cost up to $25,000 is available for solar electric or hot water systems, and/or wind power. Funding will be provided for the first 5 kW of rated capacity of solar electric systems and the first 10 kW of rated capacity of wind power systems; larger systems are eligible for a grant, but the additional capacity will not be subsidized. More information about this program is available here.

In September 2004, Indiana adopted Net Metering rules for solar, wind, and small hydroelectric generators with a capacity up to 10,000 kW. Residential customers and K-12 schools are eligible. Details are available here.

EXAMPLE RESIDENTIAL SOLAR INSTALLATION

Indiana businesses and residences demand a relatively large amount of electrical power (average: 12,504 kwh/year), requiring a solar power system of commensurate size. The following is an example of a solar installation in Indianapolis (Marion County), the state’s largest city, which has a population of almost 800,000 and more than 350,000 housing units; the main power provider is Indianapolis Power & Light.

* Roof area required – 550 sq. ft.
* Estimated mid-range cost of system/installation – $49,500
* Federal Tax Credit – $2,000
* Property Tax Exemption – yes
* Estimated increase in property value – $7,100
* Estimated 25-year utility savings – $14,896
* Reduction in greenhouse gases – 128 tons

CONSENSUS

As you can see, residential solar power systems in Indiana are a fairly costly proposition, with very little incentive offered by the state to promote their use. Net metering and property tax exemptions are a start, but still a long way from making solar power economically viable for homeowners. A lot more needs to be done here.

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