Indianapolis Solar Overview
Indianapolis sits in a moderate solar market—not the sunniest but with decent production potential. The metro area is served primarily by AES Indiana (formerly Indianapolis Power & Light) and Duke Energy Indiana, each with different solar programs. Indiana's net metering policy underwent significant changes in recent years.
AES Indiana & Duke Energy Indiana
AES Indiana (Downtown & Central Indy)
AES Indiana serves most of Marion County and downtown Indianapolis:
- Net metering: Available under Indiana law
- Credit rate: Excess generation credited at avoided cost rate
- System size: Up to 1 MW for net metering
- Interconnection: Standard Indiana process
Duke Energy Indiana (Surrounding Areas)
Duke Energy Indiana serves many Indianapolis suburbs:
- Net metering: Available for qualifying systems
- Rate structure: Similar to AES; avoided cost credits
- Time-of-use: Optional TOU rates available
- Interconnection: Duke's standard process
Indiana Net Metering Policy
| Feature | Indiana Policy |
|---|---|
| Credit Rate | Avoided cost (~$0.03-0.05/kWh for exports) |
| Self-Consumption | Full retail value (~$0.12-0.14/kWh) |
| System Limit | 1 MW |
| Policy Status | Net billing (not true net metering) |
Indiana Solar Incentives
State Incentives
- Property tax exemption: Solar exempt from property tax increases
- Sales tax exemption: No sales tax on solar equipment
- Net billing: Available but at avoided cost, not retail
- No state tax credit: Indiana doesn't offer state solar credit
Federal Tax Credit (2026 Update)
| Purchase Type | Federal Credit | Notes |
|---|---|---|
| Cash/Loan Purchase | None (25D expired) | Ended Dec 31, 2025 |
| PPA/Lease | 30% (48E) | Through Dec 2027 |
Costs & Savings in Indianapolis
Typical System Costs
| System Size | Gross Cost | Est. Annual Savings* |
|---|---|---|
| 5 kW | $14,500-15,500 | $550-750 |
| 7 kW | $20,000-22,000 | $750-1,000 |
| 10 kW | $29,000-32,000 | $1,100-1,450 |
*Assumes 60% self-consumption; higher self-consumption = higher savings
Savings Breakdown
- Self-consumed solar: ~$0.12-0.14/kWh value (full retail offset)
- Exported solar: ~$0.03-0.05/kWh value (avoided cost credit)
- Payback period: 12-16 years (depending on self-consumption)
- 25-year savings: $12,000-25,000
Indianapolis Considerations
Maximizing Value
With Indiana's avoided cost export credits, strategy matters:
- Right-size system: Match to your usage, don't oversize
- Daytime usage: Shift loads to daytime when solar produces
- Battery storage: Store excess for evening instead of low-value export
- EV charging: Charge during day = high-value self-consumption
Climate Factors
- Four seasons: Moderate production variation throughout year
- Severe weather: Occasional hail and storms; check warranties
- Snow: Light to moderate; panels typically self-clear
- Humidity: Summer humidity has minimal impact on production
The Bottom Line
Indianapolis solar can work but requires realistic expectations.Indiana's shift away from true net metering to avoided cost credits means economics are tighter than in states with full retail net metering. Payback periods of 12-16 years are typical.
Best candidates: Homeowners with high daytime usage, those adding EV charging, those considering battery storage, or those who value energy independence beyond pure financial returns. The sales and property tax exemptions help offset the weak export credits.
Key strategy: Focus on maximizing self-consumption. A well-sized system that matches your daytime usage pattern will perform better economically than an oversized system that exports heavily at low avoided cost rates.
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