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Last updated: May 2026
Avg. sun hours/day
4.4 hrs
Avg. electricity rate
$0.15/kWh
Active incentives
2
Indiana provides a property tax deduction for residential solar energy heating or cooling systems under IC §6-1.1-12-26.1, equal to the assessed value contributed by the system (effectively a 100% exclusion).
Indiana Code §6-1.1-12-26.1 provides a property tax deduction equal to the assessed value contributed by a residential solar energy system used for heating, cooling, or generating electricity. Practical effect: the assessed value increase from installing solar PV is deducted from the property's taxable assessed value before millage is applied. Homeowners file Form 18865 (Statement for Deduction of Assessed Valuation) with the county auditor, generally before May 10 of the assessment year. Indiana Department of Local Government Finance (DLGF) provides forms and guidance. Combined with Indiana's relatively high retail electricity rates (~$0.14–$0.16/kWh residential), the property tax deduction is one of the few remaining state-level economic supports for residential solar after the SEA 309 net metering phaseout.
Indiana applies the standard 7% state sales tax to residential solar PV equipment. There is no consumer-facing residential solar sales tax exemption.
Indiana's 7% statewide sales tax applies to residential solar PV equipment with no consumer-facing exemption. (Limited business-equipment exemptions exist for utility-scale renewable generation but do not extend to residential rooftop installs.) Indiana Department of Revenue (DOR) administers the regime. The combination of phased-out net metering (residential customers now on EDG at sub-retail compensation), no sales tax exemption, the property tax deduction (above), and the federal Section 25D ITC having expired 2026-01-01 leaves Indiana residential solar economics weaker than they were 2018–2022. Payback periods for new installations now typically exceed 10 years even with strong self-consumption profiles.
Indiana phased out 1:1 retail net metering under SEA 309 (passed 2017), with the final IOU transitions completed by 2022. New residential prosumers receive Excess Distributed Generation (EDG) compensation at approximately 1.25× the utility's avoided cost — typically 60–75% of retail.
Indiana Senate Enrolled Act 309 (2017) phased out traditional 1:1 retail-rate net metering for new residential and commercial solar customers. Investor-owned utilities (Duke Indiana, AES Indiana / formerly IPL, Indiana Michigan Power / I&M, NIPSCO, Vectren / now CenterPoint) transitioned new connections to the Excess Distributed Generation (EDG) tariff in stages from 2018 to 2022. Under EDG, exported kWh credit at approximately 1.25× the utility's hourly avoided cost — typically translating to 60–75% of the retail rate, materially below 1:1 net metering. Customers grandfathered onto the legacy net metering tariff retain those terms for the lesser of 2032 or 30 years from interconnection. The Indiana Utility Regulatory Commission (IURC) supervises the framework. Municipal utilities and rural electric cooperatives operate independent programmes.
Our calculator uses Indiana's actual sun hours (4.4 hrs/day) and electricity rates.
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