Solar Incentives: How Long Will They Last?

Solar panels prices have dropped 80% in the past decade. Now that the cost has leveled off, it's a good time to buy.

Solar panels prices have dropped 80% in the past decade. Now that the cost has leveled off, it's a good time to buy.

Most solar customers in Wisconsin get a 30%-40% discount with the help of two main incentives: the State of Wisconsin rebate and the federal 30% tax credit. Given the current state of each incentive, going solar in 2017 or 2018 will be a smart move.

The state rebate has morphed many times over that past decade. Last year the maximum rebate was $2400, and although we expected it might be discontinued this year, the rebate will be back in 2017! We haven’t received official news regarding the dollar amount, but it is expected to be around $1,800 – less than years past, but good news nonetheless. And although it’s likely that the incentive will be extended through 2018, there is always a chance that it won’t – we will have to wait until December 2017 to learn more.

The 30% federal tax credit (with no maximum) was established in 2009, and with help from a dramatic drop in the price in solar panels, has fueled a massive growth in solar installations across the US. The credit is 30% in 2017, 2018 and 2019, then drops to 26% in 2020 and drops again to 22% in 2021. On January 1st 2022, the credit will drop to 0%. The credit was extended a couple times in the last decade, but there is nearly no chance it will be extended beyond 2021. And a cautionary note: don’t wait until the last minute because contract prices will likely rise as demand increases when incentive level drops occur in 2019, 2020 and 2021.

There are also two lesser-known incentives in Wisconsin that give solar installations a generous helping hand. And it's doubtful either will expire any time soon.

One is the sales tax exemption: solar installations, unlike most other home property improvement invoices, are not required to include the 5.5% state sales tax. So when we tell you that a solar installation will cost $17,000, that is the total price – we will not tack on a sales tax. This saves most customers about $1,000. The other incentive is the property tax exemption. When you have solar panels installed on your home in Wisconsin, the added value is not included in your tax assessment (although it will very likely increase the fair market value of your home). So while you will be able to sell your home for more, it won’t increase your annual property tax bill. For most customers this will save them $300-$600 every year they own their home.