Indiana solar economics in 2026 hinge on one fact most state guides understate: net metering is dead for new connections, and the replacement (EDG) uses INSTANTANEOUS netting. This single mechanical detail — no monthly buffer, every exported kWh credited at the low EDG rate while every imported kWh costs full retail — drives almost everything about how solar pays back in Indiana.
The headline:
- Self-consumed solar offsets full retail (about $0.16/kWh) — same as anywhere.
- Exported solar credits at the EDG rate — prior-year average wholesale × 1.25, varies by utility, AES Indiana about $0.039/kWh (lowest), NIPSCO about $0.12/kWh (highest, close to retail).
- No monthly buffer — your daytime exports don't zero out your evening imports at 1:1. They're netted second-by-second. Daytime $0.039 in, evening $0.16 out.
- Federal §25D = $0 for 2026 purchases (OBBBA repeal).
- No SREC market — Indiana has no RPS obligation. Don't budget for SREC revenue (your neighbors in PA, MD, DE, OH have one; you don't).
- Sales tax (7%) EXEMPT on residential solar — saves about $1,700-1,900 on a typical install. Property tax 100% exempt on added home value.
Our model puts typical Indiana solar-only payback in the 9-13.7 year range depending on utility and self-consumption percentage. Self-consumption is the make-or-break lever — right-size to your load, front-load daytime appliances, and don't lean on export.
What changed federally — and what's still on Indiana quotes that shouldn't be
The federal Residential Clean Energy Credit (§25D) — the 30% homeowner credit — was repealed for systems installed after December 31, 2025. For 2026 Indiana buyers, the federal credit on a purchased system is $0. The same applies to home batteries purchased outright. The §48E commercial credit (30%) still exists, but only for leased or third-party-owned systems where construction begins before July 4, 2026 — and the lessor claims it, not you. Full federal context here.
The repeal came through the One Big Beautiful Bill Act (P.L. 119-21), signed in July 2025. Many Indiana-focused sites have updated (Palmetto Evansville notes "federal no longer available as of 2026"), but a minority still cite the 30% credit as live — outdated. If a 2026 Indiana quote includes "30% federal solar tax credit" on a purchase, ask the contractor to redo the math with $0 federal and verify with IRS.
VERIFIED 2026-06 · IRS §25D repeal under OBBBA P.L. 119-21Net metering is dead — EDG with instantaneous netting
This is the single most important Indiana solar fact in 2026, and the part most coverage gets wrong or glosses over.
Senate Enrolled Act 309 (SEA 309), passed in 2017, phased out traditional net metering at all 5 Indiana IOUs:
- AES Indiana (Indianapolis)
- Duke Energy Indiana (Bloomington and much of central / southern IN)
- NIPSCO (Northern Indiana Public Service Company)
- CenterPoint Energy / Vectren (Evansville and southwestern IN)
- Indiana Michigan Power (I&M)
The transition was complete by July 1, 2022 — every IN IOU now uses Excess Distributed Generation (EDG) for new residential solar connections. There's no path back to traditional 1:1 net metering for a 2026 install.
How EDG works
- Self-consumed solar offsets the full retail rate (about $0.16/kWh on Indiana residential) by not drawing from the grid. There's no "credit" — it's an absence of consumption.
- Exported solar is credited at the EDG rate, calculated by formula: prior-year average WHOLESALE rate × 1.25. Updated annually by utility filing.
- EDG rate varies materially by utility because each utility's wholesale generation costs differ:
- AES Indiana: about $0.039/kWh (lowest of the 5 IOUs)
- Duke Energy Indiana: about $0.045/kWh
- CenterPoint Energy: about $0.045/kWh
- NIPSCO: about $0.12/kWh (highest, close to retail)
- System size: Indiana traditional NM cap (1.5% summer peak) is moot for new EDG-only connections.
Instantaneous netting — the critical detail
The Indiana Supreme Court ruling in 2023 on the CenterPoint case finalized that EDG netting is INSTANTANEOUS — there is NO monthly buffer.
What that means in practice:
- Every exported kWh credits at EDG rate (low).
- Every imported kWh costs full retail.
- Daytime solar exports do NOT zero out evening grid imports at 1:1. They're netted second-by-second.
- This is materially worse than even monthly net billing (which would at least let your daytime exports offset that month's nighttime imports at a better effective rate).
The economic consequence: self-consumption is the make-or-break lever for Indiana solar. Every kWh you consume directly is worth about $0.16; every kWh you export is worth about $0.04 (on AES — gap of $0.12). That gap drives almost all of the practical advice in this guide.
VERIFIED 2026-06 · SEA 309 (2017); IURC EDG rate filings; Indiana Supreme Court CenterPoint decision (2023)NIPSCO feed-in tariff — separate optional program
One exception worth knowing if you're in NIPSCO territory (northern Indiana). NIPSCO offers a separate feed-in tariff program at $0.13-0.17/kWh for eligible projects, distinct from the default EDG rate.
- NOT the default EDG. Requires separate enrollment.
- Limited capacity — verify availability with NIPSCO directly.
- If you qualify and enroll, your export economics are materially better than the modeled EDG case ($0.12 default) — closer to retail.
For all other utilities (AES, Duke, CenterPoint, I&M), the EDG rate is the export rate. No feed-in option.
Grandfathering — don't confuse old systems with new
If you're researching Indiana solar and seeing conflicting export-rate numbers, this is usually why. The pre-2022 grandfathering matters but only for old systems.
- Systems interconnected before December 31, 2017: Grandfathered to traditional full retail 1:1 net metering until 2047.
- Systems interconnected 2018 through July 1, 2022: Grandfathered to full retail 1:1 net metering until 2032.
- New systems (2026 and beyond): EDG only. No path back to 1:1.
This calculator models the new EDG case — what a 2026 buyer actually gets. If you have a pre-2022 system, you're on traditional NM and this math doesn't apply to you (yet). Your terms revert to EDG at the grandfathering sunset date.
Municipal utilities and REMCs (rural electric cooperatives) may have their own terms that differ from the 5 IOU rule — verify with your specific co-op if you're outside IOU territory.
Sales tax — EXEMPT, real advantage
Indiana exempts residential solar equipment from the 7% state sales tax — confirmed across Palmetto city pages and solarinfopath. On a typical $24,000-27,000 installed Indiana system, this saves roughly $1,700-1,900 in sales tax. The exemption is automatic — installer should not be charging sales tax on residential PV equipment in Indiana.
This is one of Indiana's genuine structural advantages for solar. For context: Pennsylvania, Ohio, Maine, and Louisiana confirmed do NOT exempt solar from sales tax — buyers there add $1,000-1,350 in real cost. Indiana buyers don't.
Property tax — EXEMPT 100%
Indiana exempts 100% of the added home value from residential solar from property tax. Automatic, no application required. Confirmed across Palmetto and solarpermitsolutions. So adding solar doesn't increase your property tax bill even if it adds appraised value to your home.
No state income tax credit. Indiana does not offer a state-level solar income tax credit. The state-level incentive picture is the property tax exemption and the sales tax exemption — and that's it.
SREC — does NOT exist in Indiana
This is a frequent misunderstanding. Indiana has NO Renewable Portfolio Standard (RPS) — only a voluntary clean-energy target — and consequently NO SREC market. There is no SREC revenue stream available to Indiana residential solar owners.
Don't confuse with neighbors that DO have an SREC market:
- Pennsylvania: about $45/SREC, live market.
- Maryland: about $60/SREC, live market.
- Delaware: about $30/SREC, live market (tiered, step down to $10 in years 11-25).
- Ohio: tiny but exists, about $30-100/year revenue (essentially symbolic).
- New Jersey: $200-280/SREC on legacy programs.
Indiana: $0. Period. Don't budget for SREC revenue in your purchase decision — there isn't any. Any Indiana-focused solar quote that includes "SREC revenue" or "AEPS payments" is fictional; ask for the program citation, there isn't one.
VERIFIED 2026-06 · eia.govBattery — varies dramatically by utility; mostly for resilience
Indiana's retail-vs-export gap depends heavily on which utility serves you:
- AES Indiana: retail $0.16, EDG $0.039 → gap $0.12 (huge — comparable to Louisiana's avoided-cost case, larger than Ohio / Illinois split-rate).
- Duke Energy Indiana: gap roughly $0.10-0.12.
- CenterPoint Energy / Vectren: gap roughly $0.11-0.12 (and CenterPoint retail is highest in IN at about $0.172, so the gap matters more).
- NIPSCO: gap only about $0.04 (exports are credited near retail — battery has limited arbitrage value here).
On AES / Duke / CenterPoint, a battery has REAL arbitrage value — every kWh stored and used at retail instead of exported at EDG is worth about $0.12 instead of $0.04 (3x swing). "Store don't export" is a real lever. But:
- No statewide battery rebate. No Indiana utility currently runs a meaningful residential battery incentive.
- Federal storage credit $0 (§25D repealed for storage purchase).
- $12,000 capex on the modeled 10 kWh battery doesn't pay back on arbitrage alone — even with the high AES gap, annual arbitrage savings run a few hundred dollars at best on a typical residential system.
Indiana resilience case is genuinely strong. Indiana is in the tornado / severe weather zone, and multi-day outages happen. The dollar payback math says the battery doesn't pay; the resilience math is a personal-tolerance question. If you want backup for storm season, a battery makes sense; if you want it for ROI, the numbers don't carry.
The honest payback — middle-tier, utility-specific
At default install pricing of $2.85/W (range $2.50-3.00; typical $24,000-27,000 for an 8-9.5 kW system), our model puts typical Indiana solar-only payback in the 9-13.7 year range (per ussolarsupplier, depending on utility EDG rate and self-consumption percentage).
Where Indiana fits in our verified set:
- New Jersey (about $0.26/kWh + SuSI): about 6.5 years.
- Delaware (about $0.165/kWh + 1:1 NM + rebate / SREC + no sales tax): about 9-11 years.
- Indiana (about $0.16/kWh + EDG instantaneous + sales / property exempt + no SREC): about 9-13.7 years.
- Ohio (about $0.16/kWh + energy-only SSO export): about 12-14 years.
- Louisiana (about $0.12/kWh + avoided-cost export): about 21-23 years.
Indiana's retail rate is comparable to Ohio, but two advantages help: the sales tax exemption (real $1,700-1,900 savings) and the property tax exemption. Two disadvantages hurt: no SREC market (Indiana has zero where Ohio has some), and instantaneous EDG netting (Indiana's export math punishes exports more than Ohio's energy-only SSO).
Which utility serves you matters as much as $/W pricing. NIPSCO customers are in materially better shape than AES customers on the same install — and NIPSCO's optional feed-in tariff (if you qualify) can shift the math further in your favor.
How to read this — Indiana's case for solar
Indiana solar works on self-consumption, not on export. Right-size and load-shift accordingly.
- Right-size to your load. Don't oversize for export — EDG instantaneous netting means oversized systems just dump excess at $0.039 (or whatever your utility's EDG rate is). Match annual production to annual consumption.
- Load-shift toward daylight. Dishwasher, laundry, pool pump, EV charging during solar production hours. Every kWh shifted from grid-purchased (about $0.16) to self-consumed is worth full retail, not EDG.
- Check your specific utility's EDG rate. AES is the lowest at about $0.039; NIPSCO is the highest at about $0.12. The 3x spread between AES and NIPSCO changes payback significantly.
- NIPSCO customers — check feed-in eligibility. If you qualify for the $0.13-0.17 feed-in tariff (separate from default EDG), your export economics improve materially.
- Don't budget for SREC. Indiana doesn't have one. Quotes that include "SREC revenue" are fictional.
- Reject any quote citing the federal 30% credit on a 2026 purchase. Dead.
- Take the sales tax exemption seriously — your quote should NOT include 7% sales tax. If it does, ask the installer to remove it (or document why).
- Property tax exemption is automatic — no application needed, no paperwork.
- Battery for resilience, not ROI. Tornado / severe weather outages are a real Indiana consideration. The dollar math says battery doesn't carry $12k capex on arbitrage alone, even on the high-gap utilities (AES / Duke / CenterPoint).
- Pre-2022 systems are different. If you already have solar from before mid-2022, you're grandfathered to full retail NM (until 2047 or 2032 depending on when you connected). This guide's EDG math is for NEW 2026 connections.
If your household runs a normal residential load, you can self-consume most of what you generate, and you're on Duke / CenterPoint / NIPSCO (not the lowest-EDG AES territory), Indiana solar is a respectable middle-tier case in 2026. If you were counting on the federal credit, on an SREC market, or on traditional 1:1 net metering, none of those apply.
VERIFIED 2026-06 · Indiana DOR (sales / property exemptions); Solar United Neighbors Indiana Run your real Indiana payback →The honest picture
| Fact | Indiana (new 2026 connection) | Source |
|---|---|---|
| Federal credit | $0 (purchase) | IRS — §25D repealed under OBBBA P.L. 119-21 |
| State income tax credit | None | (no statute) |
| Net metering status | DEAD for new connections (closed July 1, 2022) | SEA 309 (2017) |
| Replacement mechanism | EDG — Excess Distributed Generation | SEA 309 (2017); IURC |
| EDG formula | Prior-year average wholesale rate × 1.25 (updated annually) | IURC filings |
| EDG netting | INSTANTANEOUS — NO monthly buffer | Indiana Supreme Court CenterPoint decision (2023) |
| Export rate — AES Indiana | About $0.039/kWh (lowest) | IURC EDG filings |
| Export rate — Duke Energy Indiana | About $0.045/kWh | IURC EDG filings |
| Export rate — CenterPoint / Vectren | About $0.045/kWh | IURC EDG filings |
| Export rate — NIPSCO | About $0.12/kWh (highest); plus optional feed-in $0.13-0.17 separate | IURC EDG filings; NIPSCO feed-in tariff |
| Self-consumed | Full retail offset (about $0.16/kWh) | (mechanical) |
| Retail rate | About $0.16/kWh (rising about 10% since 2021; CenterPoint highest about $0.172) | eia.gov |
| Sales tax | EXEMPT (7%) on residential solar — saves about $1,700-1,900 | Palmetto IN city pages; solarinfopath |
| Property tax | EXEMPT 100% on added home value, automatic | Palmetto; solarpermitsolutions |
| SREC market | NONE (Indiana has no RPS — voluntary target only) | Indiana energy law |
| Grandfathered NM (pre-2018) | Full retail NM until 2047 | SEA 309 transition rules |
| Grandfathered NM (2018-2022) | Full retail NM until 2032 | SEA 309 transition rules |
| Battery state rebate | $0 (no statewide program) | (no program) |
| Battery federal credit | $0 (§25D repealed for storage) | IRS — §25D repealed |
| Battery arbitrage gap | $0.10-0.12 on AES / Duke / CenterPoint; $0.04 on NIPSCO | (mechanical from utility EDG) |
| Typical solar-only payback | About 9-13.7 years (depends on utility + self-consumption %) | This calculator (post-§25D); ussolarsupplier |
Before you commit:
- Reject any quote that includes a 30% federal credit. Repealed for 2026 purchases.
- Reject any quote that includes SREC revenue. Indiana has no SREC market.
- Don't accept "1:1 net metering" as a description of Indiana's mechanism. Dead for new connections since July 1, 2022. New systems are on EDG with instantaneous netting.
- Check your specific utility's EDG rate. AES (about $0.039) vs NIPSCO (about $0.12) is a 3x spread.
- NIPSCO customers — check feed-in tariff eligibility before signing. $0.13-0.17 if you qualify is materially better than default EDG.
- Confirm sales tax is NOT in your installed quote. Indiana exempts residential solar from sales tax — saves about $1,700-1,900.
- Don't oversize. Instantaneous EDG netting punishes export. Match annual production to your annual consumption.
- Load-shift toward daylight. Self-consumption is the make-or-break lever in Indiana — every kWh shifted from grid to self is worth full retail, not EDG.
- Pre-2022 systems are grandfathered. This guide's EDG math is for NEW 2026 connections. If you already have solar, your NM terms continue until 2047 or 2032.
- Battery is a resilience purchase, not an ROI purchase in Indiana in 2026 — tornado / severe weather outages are real, but $12k capex doesn't pay back on arbitrage alone.
Estimates only — EDG rates change annually with each utility's IURC filing, NIPSCO feed-in tariff has limited capacity and separate enrollment, REMC and municipal utility terms vary from IOU rules. Verify with the Indiana Utility Regulatory Commission (IURC), your utility (AES Indiana, Duke Energy Indiana, NIPSCO, CenterPoint Energy / Vectren, Indiana Michigan Power, or your REMC), and the Indiana Department of Revenue for tax exemption confirmation. This is not financial advice.