Wisconsin Solar Rebates and Incentives

How Much Can You Save on Solar in Wisconsin?

Key Details

• Homeowners in Wisconsin can take advantage of the Federal Solar Investment Tax Credit (ITC), which gives them a 30% tax credit on their solar energy system.
• Solar equipment is exempt from sales taxes, and solar energy systems are exempt from property taxes.
• Net metering programs allow customers to send surplus energy generated by their systems to the grid, lowering their monthly energy costs.
• The Focus on Energy program offers rebates for eligible solar system installations.

Wisconsin Energy Profile

Wisconsin is among the sunniest states in the US. The Badger state receives about 4,000 kilojoules of sunshine per square meter, placing it sixth among all the US states in terms of total sunlight received.

Wisconsin offers the following renewable energy incentives for homeowners who use solar power benefits for the use of renewable energy.

Wisconsin Solar Rebates and Incentives at a Glance

As of 2021, the state generates up to 1,128 megawatts of solar energy. As of 2021, there were 2,942 solar jobs in Wisconsin. Additionally, Wisconsin is currently home to 182 solar companies, 43 of which are manufacturers and 73 are installers or developers. $1.3 billion in solar investments has also been made in Wisconsin.

According to the U.S. Department of Energy, the state’s electricity generation is also expected to grow by 4,243 MW over the next 5 years, ranking it 11th in terms of growth projection among other states in the US.

How Cheap or Affordable is Solar Energy in Wisconsin?

A 6kw solar energy system would cost $17,580 - $19,980 to install in Wisconsin. With the federal solar tax credit, homeowners will be able to save up to $5900.

The average cost of solar panels in Wisconsin is $2.60 per watt.

The median retail cost of grid electricity at the retail in Wisconsin is 11.01 cents per kWh. This is relatively affordable compared to other states in the US. For example, the average retail costs of grid electricity in New Hampshire and Rhode Island are 17.37 cents/kWh and 18.44 cents/kWh respectively.

Overall, the state of Wisconsin uses a total of 289.9 million BTUs of energy per capita and ranks 23rd in that regard, according to 2020 EIA estimates. In terms of residential energy usage per person, the state ranks 17th with 72.7 million BTUs. Wisconsin also has a very high energy-consuming commercial sector with 57.2 million BTUs consumed every year. This is the 15th most across the other states in the US.

Renewable Energy in Wisconsin

Biofuels are the main source of renewable energy in Wisconsin. The state is one of the top 10 producers of fuel ethanol in the country. Wisconsin’s nine ethanol facilities can produce up to 600 million gallons of fuel ethanol each year.

This exceeds double the amount of ethanol fuel that is consumed in the state. Due to Wisconsin being one of the top corn-producing regions in the country, corn is the primary feedstock used by the state's ethanol facilities. Most of these facilities are situated in Wisconsin's southern and central agricultural regions.

Additionally, the state has two biodiesel plants and is among the top 20 producers of biodiesel in the country. These two facilities have a combined production capacity of about 33 million gallons annually, slightly more than Wisconsin's yearly biodiesel consumption. 30 million gallons of biodiesel were used in the province in 2020.

Nearly a tenth of Wisconsin's net in-state electricity production in 2021 came from renewable energy. This includes hydroelectric power, wind energy, biomass, and solar energy. More than two-fifths of the state's renewable energy was produced by hydroelectric facilities, which were the biggest contributors.

Nearly three-tenths of Wisconsin's renewable power was produced using wind energy. The best onshore wind energy resources in the state are found in remote areas in the northern part of the state's western uplands and along ridges in eastern Wisconsin. The eastern and southern regions of the state are where the majority of the state's wind fields are situated.

Despite the sparseness of Wisconsin's solar resources, the state generated 10% of its renewable electricity from solar energy. About two-thirds of the state's solar energy was produced by utility-scale systems in 2021. This was the first time utility-scale systems outperformed small-scale solar energy systems.

38 utility-scale solar PV facilities in the state had a total capacity of about 507 megawatts by the beginning of 2022. This is a 135% increase from the previous year. By the end of 2023, it is projected that there will be nearly 1,500 megawatts of additional solar PV capacity coming online.

Federal Solar Tax Credit in Wisconsin

The solar tax credit is a reduction in the amount of income tax you would have otherwise paid on your solar energy system. For instance, claiming a $1,000 federal tax refund lowers your outstanding federal income tax by $1,000.

While there is no Wisconsin solar tax credit, homeowners in the state have access to the federal solar tax credit. The federal tax credit is occasionally referred to as the Investment Tax Credit (ITC).

The solar tax credit was first made available in 2005 as a means to lower the cost of using solar power. It offered a tax credit at the time that was equivalent to 30% of the installed system's value. This included batteries, inverters, solar arrays, and other devices.

The credit rate was initially expected to decline to 26% in 2022, 22% in 2023, and 0% in 2024. However, the Inflation Reduction Act, approved by Congress in 2022, retroactively extended the credit tax by ten years.

In addition, the tax benefit will decrease to 26%, 22%, and 0% by 2033, 2034, and 2035, respectively.

Wisconsin residents typically use 690 kilowatt-hours (kWh) per month as opposed to the average American's 886 kWh. Therefore, to meet their entire energy requirements, the majority of Wisconsin residents only need to install a 7 kW solar panel system or roughly 20 solar panels. When the ITC is applied, the price of a 7 kW solar panel system in Wisconsin falls from $18,200 to $12,740, a reduction of $5,460. However, bear in mind that if you sign a lease or power purchase agreement (PPA) with a solar installer, you cannot claim the solar tax credit.

The ITC program has no income restrictions, so taxpayers in all income brackets may apply. This is an important point to consider. The following expenses will be covered by the Investment Tax Credit:

• PV cells or solar PV modules. This includes the ones used to power attic fans but not the fan itself.
• Costs of contractor work for site preparation, assembly, or initial installation.
• The cost of the developer, inspection, and permit fees
• Equipment such as batteries, inverters, and mounting devices
• Energy storage units with a capacity rate of either 3 kilowatt-hours (kWh) or higher. The energy storage devices are still subject to the installation date requirements. It does not matter if they are put in a tax year that is later than the one in which the solar energy system was installed.
• Sales tax on allowable costs

Eligibility

As a resident in Wisconsin, you are eligible to claim the federal solar tax credit if:

1. You installed your solar energy system Between January 1, 2017, and December 31, 2034.

2. The solar PV system is situated at a home you own in the United States.

• Either: You own the solar power system. That is, you are neither leasing the system nor paying a solar company to purchase the electricity generated by the system.
• Or, if the electricity is produced in an off-site community, you purchased an interest in, the solar project is credited against and does not surpass your home's electricity usage.

3. The solar PV system is new or being used for the first time. The credit can only be claimed on the “original installation” of the solar equipment

How do I claim the Federal Solar Tax Credit in Wisconsin?

Tax season can be extremely stressful, but luckily, a reliable Wisconsin solar company can assist you in obtaining the federal solar tax credit. However, when submitting your return, we also advise consulting a tax expert.

The five stages you must take in Wisconsin to file your federal solar tax return are listed below:

• Step 1. Obtain the IRS Form 5695. You can obtain this form from the Internal Revenue Service website.
• Step 2. Calculate your credit on Part I of the tax form (qualified solar electric property expenses for a typical solar energy system will be reported).
• Step 3. Complete the calculations on lines 6a and 6b after entering your overall project expenses on line 1 as specified in your contract.
• Step 4. Skip down to line 13 if solar is the only green energy source you've added and you have no carryover credit from the prior year.
• Step 5. Utilizing the Residential Energy Efficient Property Credit Limit Worksheet, determine any tax obligation restrictions on line 14 of the spreadsheet. then finish the math on lines 15 and 16.
• Step 6. On line 5 of Schedule 3 (Form 1040), be careful to enter the sum from line 15.

Net Energy Metering in Wisconsin

Net metering tracks the energy used by your property from the grid and from your solar system to the grid for billing reasons. You receive billing credits for any additional energy you generate, which you can use to lower your power bills in the future.

Net metering is helpful in situations where you require more energy than you generate, such as when it is overcast or at night. According to the Solar Energy Industries Association (SEIA), one of the best renewable energy incentives available to solar users has always been net metering. It is helpful in a variety of ways, such as:

• Increasing the worth of your solar panels would inevitably raise the valuation of your house.
• Assisting you in paying off your solar energy system, allowing you to make long-term savings.
• Make the most of your electricity savings. Wisconsin homeowners, who use the most energy in the US each month, will especially benefit from this.

The majority of solar panel systems are grid-tied. This means that they can transmit and receive electricity to and from the grid, through interconnection. When your solar panels produce more energy than you consume, the excess electricity is sent to the grid in return for credits.

On the other hand, you can use the grid to supplement your energy requirements if your panels are unable to produce enough to do so.

Customers who generate their energy and send the extra to the grid are referred to as customer-generators. The customer-generator is typically paid per kilowatt-hour (kWh) for any additional energy they send to the grid.

Depending on the state and local laws that are presently in force, different levels of compensation are applicable in different places. Customers who generate excess output occasionally receive payment for their work at the full retail rate or a lesser amount. However, at other times, there may be no compensation.

Electricity charges and credits for electricity exported by customer-generators are netted off of one another at the end of the billing period. A customer-generator will be charged the difference on their account if they import more energy than they export. The customer-generator usually has the choice to carry over the excess to subsequent billing cycles if exports during a billing cycle are greater than the amount of energy taken from the grid. However, how this depends on the state's current policy. The sum, for instance, may be carried forward for an unforeseen period or on a predetermined date.

Wisconsin's net metering law is rather unique. For example, unused credits that remain at the end of the monthly billing cycle are applied to subsequent invoices at a rate of about 3 to 4 cents per kWh for the biggest utilities. Note that municipal utilities and electric cooperatives establish their net metering credits and policies. This may cause their policies to differ.

Furthermore, net metering is not entirely regulated, but it is required in every part of Wisconsin. Therefore, every utility business must give their customers the choice. Nevertheless, the rate at which your electric provider buys back any excess power generated will differ depending on your utility company.

Before making a decision, be careful to consult your utility company and solar provider. It is important to note that there is a 20 kW system size cap. However, most Wisconsin residents only require a 7 kW system.

How to Enroll for Net Energy metering in Wisconsin

This Wisconsin Public Service Commission provides steps for Wisconsin residents to follow while enrolling for net metering. If the procedure is too difficult to handle on your own, you can consult your solar company. These companies are very acquainted with the enrollment procedure.

• Review the DG Interconnection Guidelines and PSC Chapter 119 of the Wisconsin Administrative Code.
• To acquire the appropriate application and agreement forms, get in touch with the electricity provider servicing your distributed generator site. Each Wisconsin energy provider's contact details are listed on the Distributed Generation Points of Contact page.
• Only for informational purposes are the application and interconnection agreement documents. To acquire the appropriate application and interconnection agreement forms, please call your electric provider.
• Directly submit documents to your electricity provider.

Wisconsin Property Tax Exemption

In Wisconsin, general property taxes are not applied to any value contributed by a renewable energy system. The exemption still applies regardless of whether the system is considered real property or personal property.

A solar energy system is defined as "equipment that directly converts solar energy into usable forms of thermal or electrical energy" The criteria set forth herein do not apply to passive solar design components.

Based on Wisconsin's typical property tax rate of 1.76%, you can anticipate an average yearly savings of about $320.6. However, if you reside in a Wisconsin city with higher property taxes, such as Madison or Milwaukee, your savings may be larger.

Property owners must submit a request for the exemption with their local assessor by March 1st following the January 1st assessment date for which the exemption is requested to be eligible for it.

Wisconsin Property-Assessed Clean Energy (PACE) Financing

Property-Assessed Clean Energy (PACE) is a cutting-edge program that allows property owners to get low-cost, long-term loans for improvements in water conservation, renewable energy, and energy efficiency. With no upfront costs for property owners, projects funded through PACE can produce positive cash flow once they are finished.

This eliminates the financial obstacles that ordinarily prevent investment in reviving aging properties.

The terms of a PACE Financing program may be extended up to the improvement's usable life, which may be 20 years or more. It can also produce cost savings that are greater than the PACE Financing's value. As a result, company profitability improves, property value rises, and sustainability is strengthened.

PACE Financing is obtained from an open lending market and secured by a voluntarily assumed PACE Special Charge that is given back to the lender directly. If a building is sold, PACE Financings, like property taxes, may be transferred to the new owner.

The succeeding owner repays the PACE Financing's remaining debt while still enjoying the benefits of the project's upgrades. Multifamily buildings with five units or more, as well as properties used for industry, nonprofit organizations, farms, and hospitality, are considered eligible commercial properties.

State Sales Tax Exemptions in Wisconsin

All transactions in Wisconsin are subject to a 5% sales tax. However, Wisconsin exempts eligible solar equipment from the state's sales tax.

With a state tax rate of 5% and an average solar project expense in Wisconsin of $18,200, the majority of homeowners will save up to $910 on average.

Your estimate for getting solar will already include these savings because this exemption does not qualify for a rebate. This amount rises with larger systems, which also results in greater total energy savings.

Focus On Energy

Focus on Energy is a state-wide energy initiative that offers monetary rebates for eligible solar system installations. This initiative collaborates with Wisconsin utility firms on the ground level.

Wisconsin homeowners may be eligible for rebates of up to $500 for certain solar systems. Residential customers in rural areas may be eligible for an extra $500 per solar installation from the program.

For solar installations that are a component of newly constructed owner-occupied affordable housing, the program also provides much higher incentives. The maximum incentive for residential solar systems is $1,000.

Commercial solar installations, on the other hand, have a maximum incentive of $50,000. To find out if your house is eligible, examine the list of eligible rural ZIP codes.

Wisconsin Household Profile

According to 2021 Census estimates, 5,871,661 people are living in Wisconsin, and their average age is 39.6. There are 2,454,873 housing units in Wisconsin. Additionally, there are 2,718,369 housing units in Wisconsin, 66.14% of which are owned by their residents and 33.86% are rented out.