Is solar worth it in Indiana?
At Indiana’s average rate of 16.8¢/kWh and about 1250 kWh per kW of panels a year, a typical home pays back its system in roughly 21.1 years on electricity savings alone — no federal credit, which ended for buyers at the end of 2025 — then keeps saving. Run your own numbers below.
Sources: EIA · NREL · IRS. No federal credit — it ended 31 Dec 2025.
Independent estimate for guidance only — not a quote or advice. Statewide net metering has largely sunset; exports paid near wholesale on most utilities.
What drives solar payback in Indiana
Indiana homeowners pay about 16.8¢/kWh, which is 1.6¢ below the national average. A rooftop here generates roughly 1250 kWh per kW each year — below the typical US figure. On exports, Indiana offers limited net metering: Statewide net metering has largely sunset; exports paid near wholesale on most utilities.
Indiana electricity price trend
Average residential rate, monthly, May 2023 – Apr 2026. Up 18% over the period.
Source: U.S. Energy Information Administration (EIA), Electric Power Monthly · range 13.7–17.9¢/kWh
A worked example
For an Indiana home with a $147/month power bill (typical household usage at Indiana’s rate):
That nets out to a payback of about 21.1 years — shorter than simply dividing net cost by year-one savings, because power prices climb ~2.5%/yr so your savings grow each year. Year-one savings already reflect Indiana’s below-retail export rate (you save full value on the power you use as it’s made, less on what you export), which is why they’re lower than the bill. Assumes 3.00 $/W installed before incentives and a typical 40% self-consumption; your actual cost, roof and usage will differ — adjust the calculator above.
Who supplies your power in Indiana
Indiana is served by five big investor-owned utilities — Duke Energy Indiana (the largest), AES Indiana (formerly IPL, around Indianapolis), Indiana Michigan Power (I&M, an AEP company), CenterPoint Energy Indiana (the old Vectren, in the south-west) and NIPSCO in the north. Between them they cover most households, but a large chunk of rural Indiana buys power from member-owned electric co-operatives (REMCs) and a scattering of municipal utilities. All the IOUs now operate under the same post-2022 state framework, so their export rules look broadly alike; co-ops and munis set their own terms and are worth checking individually before you sign anything.
What you’re paid for what you export
Indiana's investor-owned utilities closed their legacy 1:1 net-metering programmes to new residential customers on 1 July 2022, after Senate Enrolled Act 309 largely sunset statewide retail net metering. New solar owners now sit on 'excess distributed generation' (EDG) billing instead. Power you use in the home as it's generated still offsets the full retail rate — that part hasn't changed. But surplus pushed to the grid is bought at roughly wholesale plus a small premium (about 1.25 times avoided cost), far under what you pay to buy it back later. So the whole economic case tilts towards self-consumption: size the array to what the house actually uses, and use more of it on-site. Batteries and load-shifting earn their keep in Indiana.
Indiana incentives & taxes in 2026
Indiana gives you almost nothing to stack: no statewide solar tax credit, no SREC market, and no cash rebate programme of any real size — utility rebates surface occasionally but tend to be small or oversubscribed. The one durable benefit is the state's Renewable Energy Property Tax Deduction, which keeps the value your panels add to the house out of your property-tax assessment. There's no specific state sales-tax exemption on residential solar equipment either — in practice, the property-tax deduction is the whole of the state's help.
The 30% federal credit ended on 31 December 2025 and can now only reach a homeowner indirectly through a lease or PPA. Check the current state and utility programs on DSIRE’s Indiana list, then type any incentive into the calculator above to see how it shortens your payback.
What solar costs in Indiana
Quotes for a straightforward owned rooftop system in Indiana mostly fall between $2.60 and $3.20 per watt — a touch under the typical US figure — with most clustering near the middle of that band. For a 7-8 kW home system that means $18,000 to $25,000 before any incentive, and since nothing meaningful knocks that figure down any more, the gross price is essentially what you'll pay. Indiana's installer market is competitive enough that a third quote often beats the first two.
The honest verdict for Indiana
A few years ago Indiana's numbers looked far friendlier. Now retail net metering is closed to newcomers, exports fetch near-wholesale money, the state offers next to nothing, and the federal help has expired too — leaving the maths resting on self-consumption and a middling 16.8 cents/kWh retail rate. On our default assumptions payback runs roughly 18 to 23 years; a design built tightly around using your own power brings that down, while oversizing for export pushes it out. Solar can still work in Indiana, but only on those terms — the case is far weaker than in states that still credit exports at retail.
Sources for this page
Driving electric — or heating electric — in Indiana?
Your home electricity rate also sets what it costs to charge an EV and whether a heat pump beats a gas furnace. See the Indiana EV charging cost and the Indiana heat pump vs gas comparison.