Solar Incentives in Indiana
Indiana homeowners installing solar in 2026 have a limited set of active incentives to consider. The primary state-level mechanism is the excess distributed generation (EDG) compensation framework established under IC 8-1-40, enacted by Senate Enrolled Act 309 of 2017. Under that statute, legacy retail-rate net metering is closed to new customers at investor-owned utilities; customers who enrolled before the applicable cutoff dates (generally before July 1, 2022, or before a utility reached its 1.5% capacity cap) retain grandfathered treatment. Homeowners installing systems today at investor-owned utilities instead receive an EDG credit based on the utility's average marginal price of electricity, derived from prior-year wholesale or RTO locational marginal prices. Because each utility administers its own tariff under IURC oversight, the actual export credit rate varies by utility, and homeowners should confirm the applicable rate with their specific provider before making financial projections.
On the federal side, the residential Clean Energy Credit under §25D — commonly described as the 30% federal tax credit — expired for systems placed in service after December 31, 2025, under the One Big Beautiful Budget Act (Pub. L. 119-21). A homeowner whose system is installed and placed in service in 2026 does not qualify for that credit. The loss of this substantial incentive meaningfully lengthens the payback period compared to prior years, and prospective buyers should recalculate economics accordingly.
Indiana's Renewable Energy Property Tax Deduction, which formerly allowed a deduction from assessed value equal to the cost of a qualifying solar device, was repealed by Senate Enrolled Act 1 (2025). It is no longer available for any new installation. With that deduction gone and the federal credit expired, payback calculations now rely more heavily on bill savings at Indiana's current residential average rate of approximately 17.85 cents per kWh (as of March 2026, up roughly 1.45 cents year-on-year) and on the EDG export credit applicable to the homeowner's utility.
These figures are verified as of June 2026 against official sources; programs and rates change every legislative session and rate case, and the Indiana Utility Regulatory Commission (iurc.in.gov) and Indiana Department of Local Government Finance are the authoritative sources for current program details.
Federal credit update. The federal residential Clean Energy Credit (the 30% “solar tax credit” under §25D) expired for systems placed in service after December 31, 2025. New 2026 residential installs do not qualify; a 2025 install can still be claimed on a 2025 return (IRS Form 5695). What this means for 2026 →
Current solar incentives in Indiana
Net Metering / Excess Distributed Generation (EDG) Compensation
Under Indiana's distributed generation statute (IC 8-1-40, enacted by Senate Enrolled Act 309 of 2017), legacy retail-rate net metering is closed to new customers. Customers of investor-owned utilities who took service on net metering before the cutover (generally before July 1, 2022, or before a utility hit the 1.5% cap) are grandfathered at the net metering tariff through July 1, 2047. New distributed-generation customers are instead compensated for excess generation exported to the grid under an Excess Distributed Generation (EDG) tariff approved by the Indiana Utility Regulatory Commission. Compensation is based on the utility's average marginal (wholesale) price of electricity rather than the full retail rate.
| Amount | EDG credit equals the utility's average marginal price of electricity (prior-year wholesale/RTO locational marginal price) multiplied by a statutory factor of 1.25; rate is set per utility and updated annually (each utility files an updated EDG rate around March 1). Grandfathered net metering customers continue to receive full retail-rate credit until July 1, 2047. |
|---|---|
| Who qualifies | Residential and other retail customers of Indiana investor-owned electric utilities (e.g., AES Indiana, Duke Energy Indiana, Indiana Michigan Power, CenterPoint/Vectren, NIPSCO) installing qualifying distributed generation; municipal and cooperative utilities are not bound by the IURC EDG tariff. |
| Administered by | Indiana Utility Regulatory Commission (IURC); individual investor-owned utilities administer their tariffs |
Source: IC 8-1-40 (SEA 309, 2017), esp. IC 8-1-40-5, 8-1-40-6, 8-1-40-14, 8-1-40-17; IURC Net Metering Resource Page Official source →
No longer available in Indiana
These programs have been repealed or closed and do not apply to new installations. They are listed for homeowners who still ask about them.
Renewable Energy Property Tax Deduction (solar, wind, geothermal, hydroelectric) — repealed
Indiana formerly allowed a property tax deduction equal to the assessed value attributable to a qualifying solar energy device or system installed on real or personal property, claimed with the county auditor on Form 18865. Senate Enrolled Act 1 (2025) eliminated this renewable energy deduction (along with the wind, geothermal, and hydroelectric deductions) retroactively effective January 1, 2025. Per Indiana Department of Local Government Finance guidance, individuals can no longer apply for the deduction and county auditors stopped applying it beginning with the 2025 pay-2026 cycle, so it provides no benefit for new solar installations in 2026.
Source: Senate Enrolled Act 1 (2025); formerly IC 6-1.1-12-26 / 6-1.1-12-26.1; DLGF legislative-update memo Official source →
Compare solar incentives across all states → · Check what applies to you →
Programs verified as of June 2026 against official state and federal sources (each cited above); refreshed quarterly as legislatures and utility rate cases change the rules. How we verify this data. This page is informational only — not tax or legal advice.