Indiana doesn't give you a state solar tax credit, and net metering has been effectively capped and degraded over the past several years. What Indiana does give you is a moderately sunny climate, installed costs that run below the national average, and electricity rates that have been climbing steadily. In 2026, solar makes financial sense for the right Indiana homeowner — but you need to understand the utility-specific net metering picture before signing anything.
Disclaimer: All cost and savings estimates are based on NREL PVWatts data, Lawrence Berkeley National Laboratory installer pricing surveys, and Indiana Utility Regulatory Commission net metering rules. The federal Section 25D solar tax credit expired December 31, 2025 — it is not included in any calculation on this page. Indiana's net metering rules vary by utility and have changed significantly since 2022. Get at least three installer quotes and verify your utility's current net metering policy before purchasing.
Key Takeaways
- A 9 kW solar system in Indiana costs $20,250–$27,000 in 2026 — below the national average, and no federal credit applies
- Indiana has no state solar tax credit — the 30% ITC expired; only modest local utility programs exist
- Net metering in Indiana has been capped and degraded — NIPSCO and Duke Indiana offer below-retail export rates for new customers after caps are reached
- Typical 25-year savings: $16,000–$24,000; payback runs 14–18 years depending on utility and rate structure
What Our Calculator Shows for Indiana (9 kW System)
| Parameter | NIPSCO (North Indiana) | Duke Energy Indiana | AES Indiana (Indianapolis) |
|---|---|---|---|
| System size | 9 kW | 9 kW | 9 kW |
| Peak sun hours (NREL) | 4.0 hrs/day | 4.3 hrs/day | 4.2 hrs/day |
| Annual production (est.) | 10,700 kWh | 11,500 kWh | 11,230 kWh |
| Installed cost (2026) | $20,250–$27,000 | $20,250–$27,000 | $20,250–$27,000 |
| Federal credit (Section 25D) | Expired — $0 | Expired — $0 | Expired — $0 |
| State solar credit | None | None | None |
| Net cost after incentives | $20,250–$27,000 | $20,250–$27,000 | $20,250–$27,000 |
| Net metering export rate | Below retail (wholesale) | Below retail (avoided cost) | Retail rate (cap applies) |
| Annual bill offset | $110–$150/mo | $120–$160/mo | $120–$165/mo |
| Estimated payback period | 15–20 years | 14–18 years | 13–17 years |
| 25-year total savings | $14,000–$20,000 | $16,000–$23,000 | $17,000–$24,000 |
Assumptions: $175/month electricity bill; south-facing roof at 30° tilt; 0.5%/year panel degradation; 2.5% annual electricity rate escalation. Net metering export rates vary by utility — modeled at 70–85% of retail for utilities with below-retail export policies. Run the Solar ROI Calculator for your specific inputs.
Indiana Net Metering: The Most Important Factor in Your ROI
Indiana's net metering policy is the variable that most dramatically affects solar ROI — and it's gotten less favorable over the past several years.
In 2017, Indiana passed legislation that allows utilities to reduce net metering compensation for new solar customers once the utility reaches certain solar penetration thresholds. The transition from full retail net metering to "avoided cost" compensation has already occurred or is in progress at several major Indiana utilities.
NIPSCO (Northern Indiana Public Service Company): NIPSCO has transitioned new solar customers to a below-retail export rate based on avoided cost. Customers enrolled in legacy net metering programs retain more favorable terms. New customers in 2026 should verify current NIPSCO net metering rates directly before installing.
Duke Energy Indiana: Duke Indiana similarly offers new solar customers a below-retail export rate. According to Duke Energy's Indiana tariff filings, export compensation for new customers is based on avoided cost rates substantially below the retail rate.
AES Indiana (Indianapolis Power & Light): AES Indiana historically offered retail-rate net metering with a cap. Customers who install before the cap is reached may retain better terms. Contact AES Indiana to determine current availability and cap status.
According to the Indiana Utility Regulatory Commission, the degraded net metering policies mean Indiana solar ROI depends increasingly on self-consumption rather than export revenue — similar to what California experienced under NEM 3.0.
Indiana's Installer Cost Advantage
One area where Indiana consistently outperforms coastal solar markets is installed cost. Midwestern installer labor markets, less regulatory overhead, and competitive pricing mean Indiana solar installations run below the national average.
According to Lawrence Berkeley National Laboratory's Tracking the Sun 2025 report, Indiana installed costs average around $2.25–$3.00/watt for residential systems — below the national median of approximately $2.75–$3.50/watt. For a 9 kW system, that's an installed cost of $20,250–$27,000 versus $24,750–$31,500 nationally.
This cost advantage partially offsets the weaker incentive environment. Indiana's no-state-credit, degraded-net-metering situation is partially compensated by genuinely lower install costs.
Indiana Solar Property Tax and Sales Tax Exemptions
Indiana does offer two less-publicized solar exemptions that reduce the effective cost of installation:
Property tax exemption: Indiana law exempts solar energy systems from property tax assessment. A 9 kW system that adds $25,000 to a home's market value would otherwise add roughly $500–$750/year in property taxes at Indiana effective rates. The exemption saves that amount annually.
Sales tax exemption: Indiana exempts solar electricity generation equipment from state sales tax (7%). On $25,000 worth of equipment, that's a $1,750 reduction — a one-time savings baked into installer pricing when properly applied. Confirm with your installer that they're applying the exemption, as not all do by default.
These two exemptions combined can reduce the effective cost of a 9 kW system by $3,000–$5,000 over 10 years when the property tax savings are counted. They don't show up as line-item credits on a quote, but they're real.
Does Indiana Have Any Solar Incentives at All?
Beyond the property tax and sales tax exemptions above, Indiana's state-level solar incentive landscape is sparse:
- No state income tax credit for solar (Indiana repealed its solar tax credit)
- No SREC market (Indiana does not have a renewable energy credit program for residential solar)
- No statewide rebate program (unlike Wisconsin's Focus on Energy or Massachusetts's SMART program)
Individual utilities occasionally offer limited solar rebates or programs, but these tend to be small, waitlisted, or limited to specific territories. Check directly with your utility for any current offers — the statewide picture is thin.
The Section 30C EV charger credit (30%) is still available through June 2026 — if you're adding an EV charger alongside solar, the charger qualifies for a separate 30% federal credit. More details at the IRS Section 30C guidance.
When Indiana Solar Makes Financial Sense
Indiana's longer payback periods (14–18 years at most utilities) means solar works best for homeowners who are committed to a long-term investment and understand the self-consumption strategy.
Strong case for solar:
- AES Indiana (Indianapolis) territory where full retail net metering may still be available under the cap
- South-facing roof with no significant shading — winter sun angles are low and shading impact is severe
- High electricity consumption ($200+/month) — larger bills mean larger absolute savings
- Planning to stay in the home 15+ years or aware that solar may add resale value
Weaker case for solar:
- NIPSCO or Duke Indiana territory where new customers receive below-retail export rates — self-consumption strategy requires careful sizing and possibly battery storage
- East/west-facing roof or significant tree shading — production reduction compounds the payback problem
- Planning to sell within 7–10 years — may not reach payback before sale
- Low electricity consumption under $100/month — small absolute bill means small absolute savings
What to Do Next
Verify your utility’s current net metering terms.
Contact NIPSCO, Duke Indiana, or AES Indiana directly and ask what export rate new solar customers receive today. Don’t rely on installer claims — get it in writing from your utility.
Run your personalized Indiana solar estimate.
Use the Solar ROI Calculator with your utility’s actual export rate, your monthly bill, and your roof details. The self-consumption percentage changes the payback significantly under below-retail net metering.
Confirm property tax and sales tax exemptions with your installer.
Ask each installer to confirm they’re applying Indiana’s solar sales tax exemption on your quote. This should reduce equipment cost by roughly $1,750 on a typical 9 kW system.
Get 3+ quotes from licensed Indiana solar installers.
Indiana’s competitive installer market means quotes vary. Compare at least three bids. Look for quotes that include a production estimate using your specific roof’s orientation, not just a generic calculation.
Get your Indiana solar estimate in 60 seconds
Enter your utility, monthly bill, and roof details — see your 2026 payback period and 25-year savings with no email required.
Considering battery storage? Our Battery Storage Calculator models self-consumption improvement for Indiana homeowners on below-retail net metering plans.
Related Guides
- Is Solar Worth It in 2026? — National state-by-state solar ROI guide with Section 25D expiration context.
- Solar ROI Calculator Results: Wisconsin 2026 — Neighboring state comparison with Focus on Energy rebate and similar sun hours.
- Battery Storage Incentives by State 2026 — How Midwest states compare for battery storage programs.
- Net Metering Guide 2026 — How below-retail net metering policies affect solar ROI in states like Indiana.
Sources
- NREL — PVWatts Calculator: Indiana
- Lawrence Berkeley National Laboratory — Tracking the Sun 2025
- Indiana Utility Regulatory Commission — Net metering
- Duke Energy Indiana — Solar energy tariffs
- EIA — Indiana State Electricity Profile
- IRS — Section 30C alternative fuel vehicle refueling property credit
