2025 Solar Incentives Guide for Pierre, SD - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Pierre.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Pierre?
Renewable Energy System Exemption
Residential Energy Efficiency Rebates (Offered by 12 Utilities)
Clothes Dryer: $25
Lighting: Varies
Dehumidifier: $25
Dishwasher: $25
Refrigerator: $25
Central A/C: $250 - $450
Room A/C: $25
Central A/C or Heat Pump Tune-Up: $30
Furnace with ECM: $150/unit
Air Handler with ECM: $150/unit
Air-Source Heat Pump: $250 - $450/unit
Geothermal Heat Pump: $200/ton
Heat Pump Water Heaters: $250/unit
Programmable Thermostat: $25
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are intended to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Various types of incentives, like cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be handled by the state of South Dakota, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually come off your total price before tax credits are calculated.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Pierre utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
- Tax Exemptions: These could come in the form of property tax exemptions, which let you ignore the value of your solar system when paying taxes on your home. You could also look for exemptions on sales tax at the time of purchase.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of your solar system's cost.
The ITC applies to the total cost of solar panel installation, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.
To better understand exactly how much the ITC could save you, speak with your local Pierre solar panel installation expert.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; this amount will decrease slightly each year until the end of the current program. Starting in 2023, it will also be easier to claim credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. Your local Pierre solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones as well. These incentives might be given out by the South Dakota government, or by your county or municipality. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Pierre
Nationwide solar energy use has increased enormously in the last 15 years, in part due to the increase in availability of solar incentives. You may get these incentives from the federal government, the South Dakota government or your local utility company. We suggest talking to your local Pierre solar installation expert to learn more about these incentives and to ensure that you're getting the largest number possible for your solar system.
EcoWatch's Pierre, SD Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
An excellent idea would be to talk to a representative from the company that installed your system – or reach out to a local Pierre solar installer — to better understand which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will solar panels save me annually on my electric bill in Pierre?
Typically, Pierre homeowners who install solar panels save about $921.97 per year, or about $17,517.49 over 20 years after they make the switch.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied could vary depending on which incentives you receive but typically yes, you can claim multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to make sure you are claiming all the incentives you qualify for and applying them in the correct order.
Can I claim incentives for adding solar panels to a vacation home, rental property or commercial property?
While we recommend getting in touch with your local solar installer and/or tax professional to better understand what solar incentives apply to you, many incentives can be claimed on a second home, so long as that home is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the specifics.
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