Solar Incentives & Financing in Indiana

What type of federal solar incentives are available?

Several types of incentives can help you go solar in Indiana. The main one is the 30% federal solar investment tax credit (ITC). The tax credit is a percentage of your system cost—and there’s no cap on the amount. Non-profit organizations and other entities may also be eligible to receive incentives with the new elective direct pay program.

If you are a farmer or a rural small business owner, you may be eligible for a grant or loan for your solar array from the U.S. Department of Agriculture under the Rural Energy for America Program (REAP). 

Indiana-specific solar incentives

Home solar energy systems are eligible for the Renewable Energy Property Tax Exemption (State Form 18865). This allows Hoosiers to deduct the out-of-pocket expenditures for the components – and the labor involved in installing the components – from property taxes. Be sure to select “Solar Power Device” on the form. You can find more detail about this exemption and its eligibility requirements in the Indiana Property Tax Benefits Form 51781 PDF on Page 2, in the Solar Power Device section. Contact your county assessor’s or auditor’s office for additional form questions. 

Solar Financing

Hoosier Hills Credit Union offers unsecured solar loans with terms up to 15 years.

Additional information about national solar financing options can be found elsewhere on our website.

Indiana SRECs

Solar Renewable Energy Credits (SRECs) are financial products meant to represent the “green value” of the electricity your solar energy system produces. A credit is created for every 1,000 kWh (or 1 MWh) of electricity produced by the system, with a fluctuating value based on the market where the SREC is traded.

Indiana does not currently have its own SREC market. This is because it does not have a mandatory renewable portfolio standard (RPS) that would create a state-based market. Instead, Indiana has a voluntary RPS program (known as the Comprehensive Hoosier Option to Incentivize Cleaner Energy, or CHOICE) aiming for 10% of electricity production from renewable sources by 2025. Because this program is voluntary and non-binding, utilities and electricity providers have little to no incentive to purchase SRECs from solar owners.

As a result, Hoosiers must trade their SRECs in other markets. Currently, SRECs produced by Indiana solar energy systems may be eligible to be traded in the Ohio SREC market. Unfortunately, the Ohio market is currently oversupplied and the SREC value is low.