The Net Billing Reality Check
In 2017, Indiana passed Senate Bill 309 replacing full retail-rate net metering with a net billing program called Excess Distributed Generation (EDG). New customers receive credits for exported solar power at approximately 125% of the utility's avoided cost, which works out to roughly 3.5 to 4.5¢/kWh. This is far below the 14 to 18¢/kWh retail electricity rate Indiana homeowners pay.
If you installed solar before the SB 309 transition, you may have significantly better terms:
- Systems installed before January 1, 2018: Full retail-rate net metering through July 1, 2047
- Systems installed January 1, 2018 through the transition date: Full retail-rate net metering through July 1, 2032
- Systems installed after the transition date: EDG at ~3.5 to 4.5¢/kWh from day one
If you have an existing system, check your utility interconnection agreement to confirm your grandfathered status before making any changes that could reset your tier.
With EDG paying only 3 to 4¢/kWh for exports, Indiana solar economics are driven almost entirely by electricity you use directly. Avoid designing an oversized system. The goal is to cover your load as closely as possible, aim for ~85 to 95% of annual consumption, without significant surplus generation. Every kWh you export gets you only about 3 to 4¢ back, while every kWh you self-consume avoids paying 14 to 18¢. The math strongly favors consumption-matching over export.
Tax Exemptions
Sales Tax Exemption
Property Tax Exemption
Indiana does not offer a state income tax credit for residential solar installations. Indiana's main state tax benefit for solar is the property tax exclusion, not an income tax credit. The federal ITC also expired December 31, 2025 (see below).
Indiana Utilities & EDG Rates
| Utility | Service Territory | EDG Rate (Approx.) | Notes |
|---|---|---|---|
| AES Indiana (fka IPL) | Indianapolis metro | ~3.5 to 4¢/kWh | Largest IOU in state |
| Duke Energy Indiana | Central/Northern IN | ~3.5 to 4¢/kWh | File Form 18865 with county |
| NIPSCO | Northern Indiana | Per Rider 689 (125% of market priced power); verify with NIPSCO | Higher EDG rate; verify with NIPSCO |
| CenterPoint Energy (fka Vectren) | SW Indiana / Evansville | ~3.5 to 4¢/kWh | Contact CenterPoint for current rate |
| Indiana Michigan Power (AEP) | NE Indiana / Fort Wayne | ~3.5 to 4¢/kWh | Verify current EDG tariff |
Note: NIPSCO's EDG rate may be higher than other Indiana utilities for small systems. Always request your utility's current EDG tariff sheet before contracting. Rates are reviewed and may change annually.
Local & City Programs
Bloomington residents may qualify for the city's Green Home Improvement Program, which offers rebates covering 20% of solar project costs (up to $5,000) for standard applicants and 40% (up to $10,000) for qualifying low-income households. Contact the City of Bloomington's Office of Sustainability for current application status and funding availability.
A growing number of Indiana municipalities are developing local solar programs. Check with your city or county energy office, and search the DSIRE database at dsireusa.org for the most current local incentives in your ZIP code.
Federal Tax Credit (ITC)
The federal residential solar Investment Tax Credit under IRC Section 25D expired on December 31, 2025. Systems installed in 2026 do not qualify. No congressional extension has been enacted as of October 2026. Indiana homeowners must rely on the state's tax exemptions to offset system costs. Businesses may still access the commercial ITC (Section 48/48E), consult a tax advisor.
Indiana Solar Incentives at a Glance
| Incentive | Amount / Rate | Status |
|---|---|---|
| Net Metering / EDG | ~3.5 to 4.5¢/kWh for excess (new customers) | Well below retail rate |
| Grandfathered Retail NM (pre-2018) | Full retail rate through July 2047 | If you qualify (check agreement) |
| Grandfathered Retail NM (2018-transition) | Full retail rate through July 2032 | If you qualify (check agreement) |
| Sales Tax Exemption | Not confirmed for residential solar | Check with Indiana DOR |
| Property Tax Exemption | 100% exclusion of added system value | File Form 18865 (verify 2025 rules) |
| State Income Tax Credit | … | Not available in Indiana |
| Utility Rebates (statewide) | … | No major utility rebates |
| Bloomington Green Home Program | 20 to 40% up to $10,000 (city residents only) | Bloomington residents only |
| Federal ITC (Section 25D) | … | Expired December 31, 2025 |
| Estimated Payback | 8 to 14 years (size for self-consumption) | Varies by utility territory |
Going Solar in Indiana? Get the Numbers Right.
With Indiana's EDG program, system sizing is everything. Get quotes from experienced Indiana installers who understand how to optimize for self-consumption under the SB 309 rules.
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