Indiana Solar Incentives & Tax Credits (2026)
Two separate things changed recently — the federal tax credit, and how Indiana pays for exported solar power. Both matter for the math.
The federal 30% tax credit has ended for homeowner-owned systems
The federal residential solar tax credit (Section 25D) let homeowners who bought or financed a system with a loan claim 30% of the cost back on federal taxes. Under a law passed in July 2025, that credit dropped to 0% for customer-owned residential systems placed in service on or after January 1, 2026, with no phase-down. If a provider quotes you 30% off for a system you’d own outright, ask them to confirm that in writing.
Leases and PPAs may still connect to a tax credit
Third-party-owned systems — leases and power purchase agreements (PPAs) — can still be linked to a separate commercial tax credit, provided construction starts before July 2026 or the system is placed in service by 2028. Ask any provider offering a lease or PPA to explain specifically how that applies to your contract.
Indiana’s own change: the end of traditional net metering
Separately from the federal credit, Indiana passed a state law in 2017 that phased out full retail-rate net metering. As of 2022, the state’s five largest investor-owned utilities — AES Indiana, CenterPoint, Duke Energy Indiana, Indiana Michigan Power, and NIPSCO — stopped accepting new net metering customers. New solar systems are instead enrolled in an “Excess Distributed Generation” (EDG) program, which credits exported power at a rate tied to wholesale electricity prices — typically a few cents per kWh, well below Indiana’s retail rate. See our Net Metering & EDG page for the utility-by-utility detail, since NIPSCO’s program works differently from the other four.
If your system was installed before 2018, you’re generally grandfathered into full retail net metering through July 1, 2047. Systems installed between 2018 and each utility’s net-metering cutoff date are generally grandfathered through July 1, 2032. If you’re buying an existing home with solar already installed, ask specifically which program the system is enrolled in.
Indiana state-level incentives that remain
- Property tax exemption on the added value from a solar installation.
- Sales tax exemption on qualifying solar equipment.
Indiana does not have a state income tax credit for solar.
What this means practically
Between the loss of the federal credit and the shift to EDG-rate exports, the payback math for a new Indiana solar system in 2026 is meaningfully different than it would have been under the old net metering rules. Sizing a system closer to your actual usage — so less power is exported at the lower EDG rate — matters more than it used to. Get a specific, written breakdown from any provider that accounts for your utility’s actual current rate.
Sources referenced for this page: Congress.gov (CRS report IN12611) on the residential clean energy credit; Indiana Senate Enrolled Act 309 (2017) and subsequent IURC net metering/EDG rules; utility EDG and feed-in tariff program pages. Rates and program terms change — verify current details directly with your utility or provider. This page is general information, not tax or legal advice.
See What Solar Costs at Your Address
Figures on this page are general. The only way to know what solar costs on your roof in Indiana is a quote based on your address, your roof and your actual power use.
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