Guide to Indiana Solar Incentives for Homeowners (2026)

Indiana homeowners considering solar in 2026 face a changed incentive landscape compared to just a year ago — but meaningful opportunities still exist. 

As of early 2026, the average residential electricity rate in Indiana is approximately 17 cents per kilowatt-hour (kWh), roughly 11% below the national average. With a typical household using around 876 kWh per month, that adds up to about $149 per month — and with electricity prices continuing to trend upward statewide, the long-term economics of solar remain compelling.

This guide breaks down every major solar incentive available to Indiana homeowners in 2026: rebates, state tax benefits, net metering, solar renewable energy certificates (SRECs), and more — so you can make the most informed decision possible before going solar.

Federal Solar Tax Credit (ITC) — What Changed in 2026

One of the most significant shifts affecting Indiana solar buyers in 2026 is the expiration of the federal residential solar Investment Tax Credit (ITC), also known as Section 25D. Under the "One Big Beautiful Bill" signed into law in 2025, the 30% residential solar tax credit expired on December 31, 2025, for homeowner-purchased systems.

What this means for Indiana homeowners in 2026:

• Homeowners who purchased and installed a solar system by December 31, 2025 can still claim the 30% credit on their 2025 tax return.
• New residential solar installations completed in 2026 or later are NOT eligible for the federal 30% credit under current law.
• Third-party owned systems (solar leases and Power Purchase Agreements/PPAs) may still qualify for commercial ITC provisions through 2027 — and installers often pass those savings on through lower monthly rates.

Key Takeaway: If you didn't install solar by end of 2025, the 30% federal tax credit is no longer available to you as a direct homeowner benefit. Focus on Indiana-level incentives and utility programs instead.

Indiana State Tax Benefits for Solar

While Indiana doesn't offer a direct state income tax credit for solar, the state provides two substantial tax exemptions that meaningfully reduce the cost of going solar.

Sales Tax Exemption

Indiana exempts solar energy systems from the state's 7% sales tax. Since a typical residential system costs between $33,000 and $45,000 before incentives, this exemption can save homeowners roughly $2,300 to $3,200 upfront — a significant reduction in out-of-pocket costs.

Property Tax Exemption

Solar panels typically increase a home's market value, which in many states would trigger higher property taxes. Indiana law protects homeowners from this through a renewable energy property tax exemption. If you install a solar energy system, your property taxes will continue to be assessed based on your home's pre-solar value — meaning you capture the home value boost without a corresponding tax bill increase. This exemption applies to both homeowners and mobile-home owners statewide.

Tip: Both the sales tax and property tax exemptions are automatic for qualifying solar installations — no separate application is typically required, but confirm with your installer or local assessor.

Net Metering in Indiana (2026): What You Need to Know

Net metering — the ability to sell surplus solar power back to the grid and receive credits on your electric bill — has undergone significant changes in Indiana over the past several years. Understanding the current rules is critical before going solar in 2026.

How Net Metering Works in Indiana Today

Indiana's net metering policy is governed by the Indiana Utility Regulatory Commission (IURC). Solar system owners who qualify can send excess electricity to the grid and receive kilowatt-hour (kWh) credits. However, the credit rate is set at 125% of the avoided cost rate, which is typically well below the retail electricity rate. This means you receive less credit per kWh than what you pay for electricity from the grid.

The Transition Away from True Net Metering

A landmark 2017 state law (SA309) set Indiana on a path to phase out full retail-rate net metering by 2047. As of 2022, Indiana's five largest investor-owned utilities — AES Indiana, CenterPoint, Duke Energy Indiana, Indiana Michigan Power (I&M), and NIPSCO — are no longer accepting new net metering customers. Instead, they offer an Excess Distributed Generation (EDG) program that compensates solar owners at a lower wholesale or avoided-cost rate.

Here's how grandfathering works for existing customers:

• Systems installed before 2018: Eligible for full retail net metering through July 1, 2047.
• Systems installed between 2018 and the end of net metering eligibility for their utility: Eligible for full net metering through July 1, 2032.
• New 2026 installations under investor-owned utilities: Subject to the EDG/net billing program at below-retail rates.

Rural Electric Co-ops and Municipal Utilities

If your electricity comes from a rural electric member cooperative (REMC) or a municipal utility rather than one of the five large investor-owned utilities, you may still be eligible for more favorable net metering terms. Policies vary by provider, so contact your specific utility to confirm your options.

Bottom Line on Net Metering: Going solar in Indiana in 2026 still allows you to earn credits for excess generation, but at a below-retail rate. Your installer should model expected savings based on your utility's current EDG buyback rate, not the retail rate.

Solar Renewable Energy Certificates (SRECs) in Indiana

Solar Renewable Energy Certificates (SRECs) are tradeable credits generated for every 1,000 kWh (1 megawatt-hour) of electricity your solar system produces. In some states, utilities are legally required to purchase SRECs, creating a revenue stream for homeowners. Indiana's situation is more limited.

Indiana's SREC Landscape

Indiana does not operate a statewide SREC marketplace. The state lacks a Renewable Portfolio Standard (RPS) that would compel utilities to purchase SRECs, which is the primary driver of SREC markets in other states.

However, Indiana solar owners have a few options worth exploring:

• NIPSCO Feed-In Tariff (Performance-Based Incentive): NIPSCO (Northern Indiana Public Service Company) offers a performance-based incentive program that functions similarly to SRECs. Solar systems between 5 kW and 10 kW can earn credits of $0.15 to $0.17 per kWh generated. Systems larger than 10 kW receive $0.13 to $0.15 per kWh. This program is available exclusively to NIPSCO customers, and availability is limited.
• Out-of-State SREC Sales: Some Indiana solar owners — particularly those with smaller systems — have historically been able to sell SRECs into neighboring state markets (primarily Ohio) through third-party aggregators who bundle credits and sell them on your behalf. This is not guaranteed income and depends on market conditions in other states.

Note: If you earn income from NIPSCO's feed-in tariff or from out-of-state SREC sales, those earnings are reportable as taxable income on your federal and state returns. Consult a tax professional for guidance.

Utility and Local Rebate Programs

Indiana does not currently offer a statewide solar rebate program for homeowners. However, a handful of utility-specific and local programs can provide additional savings:

• NineStar Connect: Offers a cash-back incentive of up to $1,500 for eligible energy-efficient installations for its customers.
• Tipmont REMC: Provides rebates of $50 to $100 for energy-efficiency upgrades.
• NineStar Connect and other smaller cooperatives: May offer between $25 and $350 for various efficiency upgrades, though these are not always solar-specific.
• Indiana Community Action Association (IN-CAA): This nonprofit, serving Indianapolis, Columbus, Fort Wayne, and Gary, received EPA Solar For All Initiative funding. Low-to-moderate income households in these areas should monitor for upcoming program openings.

Always check directly with your utility provider for the most current rebate and incentive offerings, as these programs change frequently.

Home Value and Resale Benefits

Beyond direct incentives, going solar in Indiana can increase your home's resale value. Research suggests that solar installations add meaningful value to homes on the real estate market — while Indiana's property tax exemption ensures you won't pay higher taxes on that increased value. Solar homes in Indiana often sell faster and at a premium compared to non-solar homes, making the investment worthwhile even from a pure real estate perspective.

2026 Solar Financial Snapshot for Indiana Homeowners

Here is a quick summary of what a typical Indiana homeowner can expect when going solar in 2026:

• Average system cost (13.93 kW): $33,715 to $45,615, averaging approximately $39,665 before incentives.
• Federal ITC (Section 25D): No longer available for new homeowner-purchased installations in 2026.
• Sales tax savings (7% exemption): Approximately $2,300 to $3,200, depending on system size.
• Property tax exemption: Full exemption on increased home value — ongoing annual savings.
• Net billing/EDG credits: Below-retail-rate credits for excess generation, varying by utility.
• NIPSCO feed-in tariff: $0.13 to $0.17/kWh for eligible NIPSCO customers.
• Estimated 25-year savings (cash purchase): Approximately $24,000 to $25,000 after system payback.
• Typical payback period: 9 to 13.7 years, depending on system size and utility rates.

Need Help Navigating Incentives? Reach Out to US Solar Supplier

Indiana's solar incentive landscape has evolved considerably in 2026, and making sense of all the programs, utility-specific rules, and changing federal policy can be overwhelming. That's where US Solar Supplier comes in.

Our team specializes in helping Indiana homeowners identify every incentive they qualify for, from state tax exemptions to utility-specific feed-in tariffs and SREC opportunities. We'll help you evaluate your current electricity costs, model your long-term solar savings, and connect you with reputable local installers who can design a system that maximizes your return.

👉 Contact US Solar Supplier for personalized guidance on solar equipment, design services, and homeowner-focused solar planning in Indiana.