What to Know Before Getting Solar Panels in Indiana

If you live in Indiana and want to lower your electric bill, solar panels could be the solution. 

Electricity rates in Indiana have seen a slight dip in 2023, but solar is still viable option for those looking to spend less on their monthly electric bill, lessen their reliance on the grid and power their home with clean energy. 

Rising electricity rates happen because of fluctuating prices of fossil fuels and plant shutdowns. Since Indiana’s electricity generation comes mostly from coal and natural gas, your utility bill can sometimes be unpredictable. One way to take control and become energy independent is to go solar — and federal and state incentives make solar an appealing option for Hoosier state residents.   

One potential obstacle: Indiana phased out its net metering benefits in 2022, which allowed residential solar owners to send excess solar generation back to the grid and receive a credit on their next electric bill. But those who installed solar panels before 2023 will continue to receive net metering benefits.

Here’s what you should know if you’re thinking about getting solar panels on your home in the Hoosier State.

Average cost of solar panels in Indiana 

Here’s a look at the average cash price for a 5-kilowatt system before factoring in tax credits incentives, according to data from FindEnergy.com.

Indiana solar panel costs

System size (kW)	Price per watt	Total cost
5	$4.10	$20,476

Solar financing options in Indiana

There are various ways to pay for solar panels in Indiana. Each one has its pros and cons. 

Cash: When you buy a solar system with cash, you don’t need to deal with interest or loan fees. While the upfront cost is high with a cash payment, you can reduce the total cost by claiming the 30% residential clean energy credit. 

Solar loan: If cash is not an option, consider a solar loan. A loan requires no expensive upfront payment but you will pay interest and fees, which can add up to a considerable amount over time. Using cash or a loan gives you a more significant return on your investment because you can apply for various incentive programs to lower the overall cost of solar panels.

Other loans: You don’t have to go with a solar loan from your installer or another solar company. You can also finance solar panels through home equity loans, home equity lines of credit and personal loans. These products all have their own advantages and disadvantages. Know the risks, such as using your home as collateral, and shop around and compare to see what gives you the best deal. 

Solar lease: If you choose to lease solar panels, a solar company installs them on your property, but the ownership remains with the company. You pay a fixed monthly price for the electricity generated from the panels. Since you won’t own leased solar panels, you won’t be eligible for tax and other financial incentives, but the leasing company will. 

Power purchase agreement: With a power purchase agreement (PPA), a solar company installs solar panels on your rooftop but owns and maintains the solar panels. You pay a fixed price per kilowatt hour for electricity produced by solar panels. The solar company retains all incentives because it owns the solar system, which means you won’t be eligible for the incentives. You won’t be able to take advantage of any solar incentives if you sign up for a solar lease or PPA, but leases and PPAs are excellent options for those who can’t afford the upfront capital or are ineligible for a loan. 

Indiana solar panel incentives or rebates

Despite the end of net metering, Indiana homeowners have several other solar incentive programs to reduce the cost of solar. The residential clean energy credit, a federal solar tax credit program, is one of the essential incentives available to all American homeowners. With this tax credit, you can claim 30% of the cost of a solar system from your federal income taxes. The credit is 30% through 2032. After that, it drops to 26% in 2033, 22% in 2034 and expires in 2035. 

Indiana solar incentives

Program	Description
Renewable energy property tax exemption	Owners of solar systems installed after Dehttps://www.cnet.com/home/energy-and-utilities/do-solar-panels-increase-your-homes-value/c. 31, 2011, are exempt from property taxes on any added value to their property from the solar panels. The property tax exemptions apply only to residential property owners and mobile homes with solar systems, not public utilities and electricity retailers operating solar systems.
Sales tax exemption	Under this Indiana rule, you don’t have to pay sales taxes on many system components, including panels, inverters and mounting equipment.
NIPSCO Feed-In Tariff	The utility company NIPSCO pays feed-in tariffs to owners of solar systems between 3 kilowatts and 1 megawatt of capacity. NIPSCO provides a bill credit based on the surplus energy you send to the power grid. The difference between a feed-in tariff and net metering is that feed-in tariffs aren’t tied to the rate you pay for electricity. You must complete an application form on the utility’s website to receive the tariffs.
Solar easements and rights laws	Under Indiana’s solar easement and rights laws, you can voluntarily enter a solar easement contract with your neighbors to ensure your solar panels have access to sunlight. The law stops zoning and planning authorities from restricting or banning the use of solar on your property.

Indiana solar panel companies

There are 91 solar companies in Indiana, including 26 installers. CNET has reviewed the best solar installers; here are some additional companies in Indiana to consider.

Advanced Solar

Advanced Solar provides residential, commercial and agricultural solar services in Indiana ranging from solar system design to inspection and post-installation customer support. Advanced Solar doesn’t publicly provide information on whether it offers solar leases or PPAs or the terms of its warranties.

ADT Solar

One of the largest national solar and battery installers, ADT Solar (formerly Sunpro Solar), expanded its service area to Indiana at the end of 2022. The company handles the entire customer lifecycle, from solar system design to installation, including permitting paperwork and inspection, and you get a 24/7 solar monitoring service after installation. ADT Solar provides 25-year warranties for solar panels, solar inverters and quality of work. 

SunPower Solar

A veteran in the solar business, SunPower both manufactures solar panels and provides installation services to homeowners via an extensive network of certified installers. With SunPower, you get a 25-year guarantee for product, performance and quality of work and a 10-year battery warranty. You can pay for your system through loans, cash or a solar lease. SunPower also offers power purchase agreements. Its financing arm, called SunPower Financial, provides solar loans to underserved communities.

Whole Sun Designs

Based in Bloomington, Indiana, Whole Sun Designs installs solar systems and batteries for residential, group and commercial customers in Indiana, Kentucky and Illinois. While the company focuses on residential, grid-tied solar systems, it also installs solar heaters and off-grid solar power systems. The company installs Q Cells solar panels and SolarEdge inverters for its residential solar customers. While Whole Sun Designs provides a 25-year product warranty, it doesn’t specify if it gives a performance or quality of work warranty.

YellowLite 

YellowLite operates in eight states, including Indiana. This Ohio-based company provides customers with solar installation, repair and maintenance. YellowLite also offers online monitoring of your solar system’s performance. It provides a 10-year quality of work warranty, but does not specify warranty information for components. YellowLite provides solar financing services in partnership with GreenSky Credit, Clean Energy Credit Union and traditional banks.

Read more: Want something smaller than a whole-home solar system? See our picks for the best portable solar panels and solar generators.

Installation factors to consider

Many factors can determine whether it makes sense to go solar.  

• Home insurance: Adding a solar system to your home insurance policy will provide additional protection. Ask your home insurance company if it covers solar panels. 
• Location: Determine how much tree shading your property gets throughout the day. If your solar panels are shaded most of the day, they will not produce enough power to meet your needs. An installer may recommend removing or trimming trees to provide more direct sunlight to your panels.
• Rent or own: While homeowners can decide whether to install solar panels on their property, renters may not have that flexibility. Landlords could reject the idea of installing solar panels in their rental property. The best way for renters to go solar is to join a community solar program. 
• Roof status: One of the first things you need to do before installing solar is to get a professional assessment of your roof’s condition and age. It’s more expensive to remove solar panels and replace the roof than to fix the roof before solar installation. An experienced solar company can help you determine if your roof needs repairs before installing solar panels.  
• The type of solar system: You’ll have plenty of choices when it comes to what solar panels you get. Some are more efficient, and you can also choose a solar roof, which looks more like traditional shingles.

FAQs