Resources > Solar Incentives & Financing in Indiana

Solar Incentives & Financing in Indiana

• Factsheet

May 3, 2024

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. Note: In July 2025, Congress voted to repeal tax credits for solar. Click here to contact your members of Congress and share your support for solar energy.

The residential solar tax credit expires at the end of 2025. If buying a system outright or through loan financing, homeowners will no longer be able to qualify for the credit. However, third party ownership models (solar leases and power purchase agreements) qualify under the commercial tax credit. This is still in effect through 2029. In these cases, the system owner would be eligible for the federal tax credit as long as certain requirements are met. Your solar installer will be able to let you know if your system qualifies.

Nonprofits and small businesses use the commercial tax credit. Systems using this tax credit must be installed by the end of 2029 and follow certain rules about Foreign Entities of Concern requirements and when to start construction. IRS Elective Pay for nonprofits is still active. Your solar installer will be able to let you know if your system meets these requirements. Most of these requirements come into effect in 2026.

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). Grant recipients would be eligible for the commercial tax credit, assuming the requirements listed above are met. Please note that the USDA is not accepting new REAP grant applications at this time. Please sign up to receive updates on the program’s status, check this page, and the USDA’s REAP page for more.

Indiana-specific solar incentives

There are no state-wide Indiana-specific solar incentives at this time.

Solar Financing

Indiana’s Smart-E Loan Program is an accessible and affordable financing option for homeowners in Northeast Indiana.

Bloomington’s SEEL Program provides funding to nonprofits, community organizations, and small businesses in Bloomington for solar projects and efficiency upgrades.

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.  

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Have follow up questions or need assistance?

Email us at inteam@solarunitedneighbors.org