Solar in Indiana

Indiana's residential solar policy is defined by Senate Enrolled Act 309 (2017), which moved the state from full retail net metering to the Excess Distributed Generation framework. Under EDG, exports are credited at each utility's avoided cost — roughly $0.03–0.05/kWh — well below the retail rate. Duke Energy Indiana, AES Indiana, NIPSCO, CenterPoint Energy, and Indiana Michigan Power each set their own avoided-cost figure within the framework, and existing customers are generally grandfathered at the terms of their interconnection.

The state's stable residential incentive is the property tax exemption (IC 6-1.1-6-3.3), which exempts solar systems from property tax on their added value. Indiana offers no state income tax credit, no sales tax exemption, and no functioning SREC market. The federal Section 25D residential credit expired December 31, 2025; leased and PPA systems may still access Section 48E for projects that began construction before July 6, 2026.

The policy direction has been toward reduced export compensation, consistent with the national trend, but the property tax exemption and the still-decent retail rate keep the Indiana case workable for households that size for self-consumption. The avoided-cost rate is the key variable to confirm at installation, since it determines the value of any surplus.

Indiana's 4.5 peak sun hours put it in the Midwestern norm, with productive summers offset by shorter, often cloudy winter days. The state is fairly uniform solar-resource-wise: the southern tier near the Ohio River runs marginally higher, while the lake-effect belt around South Bend and the northern counties sees slightly more winter cloud cover. Hot, humid summers drive air-conditioning load that aligns well with peak solar output.

Because the EDG tariff compensates exports at only a few cents per kilowatt-hour, the design philosophy favors self-consumption over raw output. A system matched to daytime household load captures the full $0.16/kWh retail value of every panel, while an oversized array exporting a large midday surplus earns back only the avoided-cost credit. West- and southwest-facing arrays that extend production into the late-afternoon cooling peak can outperform pure south-facing designs on dollars. The installer's familiarity with the specific utility's avoided-cost rate — Duke, AES, NIPSCO, CenterPoint, or I&M — is the detail that most affects a correct sizing decision.

Winter output is genuinely reduced by day length and persistent cloud cover, so most annual production comes from April through September. Systems sized to capture that productive season fully, while minimizing exported surplus, produce the best returns under the EDG structure.

Indiana's $2.80/W installed cost is below the national average, with a typical 8 kW system around $22,400 before incentives. The 30% federal residential credit (Section 25D) ended December 31, 2025, leaving the state property tax exemption (IC 6-1.1-6-3.3) as the primary structural offset for an owned 2026 system. Indiana offers no state income tax credit, no sales tax exemption, and no SREC market.

Payback near 13.8 years on the 8 kW model is solid for a Midwestern state with a reduced export tariff, driven by the combination of low cost, the ~$0.16/kWh retail rate, and the property tax exemption. The self-consumed portion of production — the majority for a well-sized system — earns the full retail rate, which is what carries the case. The exported surplus earns only the avoided-cost credit, which is why oversized systems pay back more slowly.

Batteries are not subsidized in Indiana, so storage is justified on storm-resilience grounds rather than tariff arbitrage. The avoided-cost export rate does not reward time-shifting enough to justify a battery on economics alone.