Indiana Solar Incentives & Rebates Guide 2026

The federal Investment Tax Credit (ITC) allows Indiana homeowners to deduct 30% of the total cost of a solar energy system from their federal income taxes. For a typical 6kW system costing $16,920 in Indiana, that's a direct tax credit of $5,076. This isn't a deduction — it's a dollar-for-dollar reduction of your tax bill.

The 30% ITC is available through 2032 under the Inflation Reduction Act, then steps down to 26% in 2033 and 22% in 2034. There's no maximum cap on the residential credit. If your tax liability is less than the credit amount, you can roll the remaining credit forward to the next tax year. The system must be installed on your primary or secondary residence, and you must own it (leased systems don't qualify for the homeowner credit).

Indiana does not currently offer a state-level solar tax credit. However, Indiana homeowners still benefit from the substantial 30% federal ITC, worth $5,076 on a typical 6kW system. Even without a state credit, solar is economically attractive in Indiana with electricity rates averaging 16.23¢/kWh — well above the national average.

Great news for Indiana homeowners: Solar energy systems are exempt from property tax assessments. 100% property tax exemption Studies show solar adds 3-4% to home values. For a $300,000 home, that's roughly $12,000 in added value — and with Indiana's property tax exemption, you save approximately $132 per year in property taxes you'd otherwise owe on that increased value.

Indiana does not currently exempt solar equipment from state sales tax. This means you'll pay the applicable sales tax on your solar system purchase. However, the 30% federal ITC and other available incentives more than compensate for this cost in most cases.

Net metering policy: Varies by Utility. Net metering phased out in 2022 for new customers; utilities now offer excess distributed generation (EDG) at wholesale/avoided cost The current system size cap is 1 MW.

Net metering policies in Indiana vary by utility. Contact your local electric provider to understand the specific buyback rate and any system size limitations that apply to your service territory.