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Indiana Office of Energy Development

OED > Renewable Energy In Indiana > Overview of Renewable Energy Sources > Solar Energy Solar Energy

Sunset Solar energy is a good option for Hoosiers to heat water and air in their homes and businesses. Hoosiers can also use solar photovoltaic panels to offset their traditional electricity use from the electric grid. As of 2013, Indiana has about 55 megawatts (MW) of solar PV installed, most of which is sold to Indiana utilities through purchase power agreements. This map shows  Indiana's solar resource potential.  

This page features brief explanations of how solar technology works and lists local and federal funding and incentives for solar technologies.

Solar Energy Technology

Solar Panels for electricity: A photovoltaic (PV) cell, commonly called a solar cell or PV, converts solar energy directly into electrical power. Individual PV cells are grouped into panels and arrays of panels that produce electricity to power single home or businesses. Learn more about installing solar arrays here. The National Renewable Energy Lab has created the In My Backyard (IMBY) calculator that shows how much electricity you can generate through Photovoltaic (PV) solar power at your home or business. Access the IMBY Calculator by clicking here.  

Solar Sytems for heating: Low-temperature solar collectors also absorb the sun's heat energy, but instead of making electricity, use the heat directly for hot water or space heating in homes, offices, and other buildings. Solar systems can dramatically reduce the amount of energy you need to purchase from a utility, because space and water heating are normally the largest uses of energy in a home. Solar space and water heating systems can be classified as passive or active.
  • Active heating systems use solar energy to heat a fluid - either liquid or air - and then transfer the solar heat directly to the interior space or to a storage system for later use. Fans or pumps are used to circulate the heated air or heat absorbing fluid throughout the home. Learn more about active space heating systems here 
  • Active solar water heaters use the sun to heat either water or a heat-transfer fluid in the collector, and they involve circulating pumps and controls. Learn more about solar water heating systems here.
  • Passive space heating sytems allow a home to collect heat from the sun shining through south-facing windows and retain it in materials that store heat. For space heating systems, air in the home circulates past a solar heat surface and through the home by convection (less dense warm air tends to rise while denser cool air moves downward). Learn more about passive space heating here.
  • For passive solar water heaters, water flows through the system when warm water rises as cooler water sinks. The collector is placed below the storage tank so that warm water will rise into the tank. No mechanical equipment is needed for passive solar space or water heating. Learn more about passive solar water heaters here.

How to Pay for Solar Projects over Time

Due to technology costs, solar energy systems usually have large upfront costs which will then be recovered over time as the system lowers your monthly energy bills. This section decsribes several ways to lower your upfront costs, earn a little money over time, and ulitmately reduce your project's payback period.          

Utility Incentives  

Net metering progams allow customers to receive credit on their utility bills for the energy that their solar energy system produces. Meters essentially run backwards to track your energy production and result in lower monthly energy bills. System capacity size must be equal or less than 1 megawatt (MW). The following utilities offer net metering programs: Duke Energy, Indiana Michigan and Power Company (I&M),  Indianapolis Power and Light (IPL), Northern Indiana Public Service Company (NIPSCO), and Vectren.

Solar Energy Rebates: Indianapolis Power and Light (IPL) offers a Small-Scale Renewable Energy Incentive Program to both residential and small to medium-sized commercial and industrial customers. The program will provide incentive payments of up to $4,000 per system: $2.00 per Watt installed. Maximum size: 19.9 kW. Learn more from IPL.

State Incentives

Renewable Energy Property Tax Exemption: For any solar thermal, photovoltaic, and other solar energy systems installed after December 31, 2011, the assessed value of the system is exempt from property taxes. Property owners that wish to claim this deduction must fill out Form 18865 and file it with the local county auditor. Questions about this incentive should be directed to the local auditor or assessor. The Department of Local Government Finance outlines the incentive.

Indiana Sales Tax Incentive for Electrical Generating Equipment: equipment, machinery, and tools used in the production of renewable electricity are eligible for this exemption.

Indiana Income Tax Deduction for Solar-Powered Roof Vents or Fans: The amount of the deduction is equivalent to the lesser of either 50% of the installed cost or $1000. For more information, please see Indiana Department of Revenue’s Information Bulletin #105.

Federal Incentives

The Rural Energy for America Program (REAP) provides grants and loans for energy efficiency and renewable energy projects in rural communities and on farms. Contact your local USDA office for more information.

Business Energy Investment Tax Credit: The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems are eligible. Passive solar systems and solar pool-heating systems are not eligible. This credit expires 12/31/16. Learn more here.

Residential Renewable Energy Tax Credit: Tax credit of 30% of cost with no upper limit. Applies to solar water heaters and to solar PV systems. Expiration: December 31, 2016. Learn more here.

Energy-Efficient Mortgages: Homeowners can take advantage of energy efficient mortgages (EEM) to either finance energy efficiency improvements to existing homes, including renewable energy technologies, or to increase their home buying power with the purchase of a new energy efficient home. Learn more here.

Solar Renewable Energy Credits (SRECs)

The solar renewable energy credits (SRECs) trading system allows your solar energy system to earn a small amount of money for each kilowatt-hour (kWh) it produces. Owners of small systems can enter into a long-term contract with third-party aggregators who will then sell SRECs to utilities in states like Ohio. Once a solar energy system is certified and registered, one SREC can be awarded for 1000 killowatt-hours of electricity produced. Large solar producers can opt to sell their credits directly to utilities. OED does not endorse any one SREC third-party aggregator, but some common ones are as follows: SRECTrade, Sol Systems, Midwest Solar Aggregation Group, and Flett Exchange. You can also ask your solar installer which SREC trader he or she recommends.  

Grants

Check OED's Energy Grant Resources page periodically for grant opportunities that fit Indiana businesses and nonprofits. This grants opportunities are not provided by OED; instead, they come from the local, state, and federal level. Some grants are from private foundations and utilities, while other opportunities are government grants.

Choosing a Solar Contractor

The following websites list solar contractors in your area, and some of the sites give user reviews of the contractors' work. Be sure to shop around to get the best price.

  • Solar Indiana
  • Solar Reviews
  • getsolar.com

    In addition to customer reviews, you may want to consider whether the solar contractor is certified by The North American Board of Certified Energy Practitioners (NABCEP). The State of Indiana does not require a solar contractor to obtain a license or certificate; however, solar contractors can voluntarily attain a certificate to instill confidence in consumers about the quality of their work. The North American Board of Certified Energy Practitioners is a nationally-recognized, independent, voluntary certification program for photovoltaic and solar-thermal system installers. To become NABCEP-certified, installers must have one year of installation experience and must document all training and installations. Installers must also pass a rigorous exam, sign a code of ethics, and take continuing education courses for re-certification every three years. 
     
    Useful Links
    OED hopes that these links provide a comprehensive guide of the available renewable energy businesses both in Indiana and other parts of the world. However, OED does not provide endorsements for organizations.

    Programs

    The Indiana Office of Energy Development formed the Indiana Solar Energy Working Group (ISEWG) to promote and support the use of solar energy in indiana, as well as the growth of supply chain, manufacturing and solar power related commercial/undustrial efforts in Indiana. The Inaugural meeting was held October 28, 2010 in Indianapolis. The group is not currently active.
      
    MEETINGS AND MATERIALS

    ISEWG Meeting Materials--October 28, 2010
    Agenda: Download here.  
    Hutzel presentation: Download here.
    Hylla presentation: Download here.
    Woodall presentation: Download here.

    ISEWG Meeting Materials-- January 11, 2011
    Agenda: Download here.
    Crawmer presentation: Download here.
    Kuipers presentation:  Dowload here.
    Mann presentation:  Download here.
    Washington presentation:  Download here.

    Contact

    For more information about solar power,  renewable energy, and programs offered by the Indiana Office of Energy Development,  contact Megan Ottesen,  mottesen@oed.in.gov.