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, reduce 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 policy in 2022, which had 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 have access to net metering.
Here’s what you should know if you’re thinking about getting solar panels on your home in the Hoosier State.
Best national solar panel companies in Indiana
There are 91 solar companies in Indiana, including 26 installers. CNET has reviewed the best national solar installers; here are some to consider.
Local solar panel companies in Indiana
You don’t have to choose a big national brand. Here are some local companies we identified that operate in Indiana.
How to determine which solar company in Indiana is best for me
Your choice of solar panel company should be like choosing any other contractor for a big project: You want a company that has a good reputation, a good price and a history of quality work. That means, most importantly, that you need to get multiple quotes.
Have representatives from several companies give you estimates of what kind of system they can install and choose one that best fits your wants, needs and budget.
Talk with your neighbors who have solar panels to see what companies they used and what their experiences were like. Ask around and find plenty of options to consider.
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 and incentives, according to data from FindEnergy.com.
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.
Read more: Want something smaller than a whole-home solar system? See our picks for the best portable solar panels and solar generators.
How to pay for solar panels 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.
Installation factors to keep in mind
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.