How Indiana Dismantled Net Metering — and What Replaced It
Traditional net metering credits solar owners at the full retail electricity rate for every kilowatt-hour they export to the grid. Indiana's Senate Enrolled Act 309 (2017) phased this out. Under the current framework, new Indiana solar customers receive a "Distributed Generation" (DG) credit for exports that is set through Indiana Utility Regulatory Commission (IURC) proceedings — and the rate hovers around 25% of the retail electricity rate.
At AES Indiana's (formerly Indianapolis Power & Light) current rate of approximately 17.42¢/kWh, that means new solar customers in Indianapolis receive roughly 4.4¢/kWh for power they export to the grid. For context: Illinois pays 18.82¢ full retail + SREC bonuses. Ohio pays 87% of retail (~15.6¢). Indiana pays 4.4¢. The gap is stunning.
Self-consumed solar is worth 17.42¢/kWh (AES Indiana's avoided retail cost). Exported solar is worth ~4.4¢/kWh. This means the only way to make Indianapolis solar work economically is to consume essentially everything your panels produce. Any oversizing — any export — is dramatically penalized. A system sized for 110% of your consumption exports 10% of production at 25% of its value, dragging down overall ROI significantly.
| Indiana Solar Incentive | Status (2026) | Detail |
|---|---|---|
| Indiana Net Metering | ❌ Ended 2017 | Replaced by Distributed Generation rate at ~25% of retail |
| DG Export Credit (AES Indiana) | ⚠️ ~4.4¢/kWh | Set by IURC; approximately 25% of retail for exports |
| DG Export Credit (Duke Energy IN) | ⚠️ ~4.0–4.5¢/kWh | Similar structure under IURC authority |
| Indiana Sales Tax | ⚠️ Taxable | Indiana does NOT exempt solar equipment from 7% sales tax |
| Property Tax Exemption | ✅ Active | Indiana solar installations exempt from added property tax assessment |
| Indiana State Tax Credit | ❌ None | Indiana has no state solar income tax credit |
| Federal Tax Credit | ❌ Eliminated | Section 25D ended Dec 31, 2025 |
The property tax exemption provides modest long-term value — it prevents your solar system from increasing your home's assessed value (and thus your annual property tax). But it doesn't offset the absence of any meaningful purchase incentive or competitive export credit.
One additional insult: Indiana charges its full 7% sales tax on solar equipment purchases. Most states (including Illinois, Ohio, Florida, and Nevada) exempt solar from sales tax. Indiana does not. On a $22,000 system, that's approximately $1,540 extra you pay at purchase that homeowners in neighboring states don't.
Indiana's Grandfathered Solar Systems: A Privilege Worth Understanding
When Indiana's legislature ended net metering in 2017, existing solar customers were allowed to keep their full retail-rate net metering credits under grandfathered protections. The grandfathering period varies by utility:
- AES Indiana (Indianapolis Power & Light) — customers who installed before the policy change received full net metering protection through approximately 2032 (15 years from transition)
- Duke Energy Indiana — grandfathered systems similarly protected through approximately 2032
If you're purchasing a home in Indianapolis neighborhoods like Broad Ripple, Meridian-Kessler, Irvington, or Fountain Square that has solar panels already installed before 2017, ask specifically about the grandfathering status. A grandfathered system receiving full retail net metering credits (17.42¢/kWh export vs. 4.4¢) adds substantial value — potentially $3,000–$6,000 more in remaining value than the same panels installed today, depending on years remaining and system size. This is a real and often underappreciated home buying consideration in Indianapolis.
When grandfathered systems reach their protection expiration (around 2032 for most Indiana pre-2017 installs), those customers will transition to the current DG export rate structure. Indianapolis solar owners in this category should start now planning for that transition — whether through adding battery storage to maximize self-consumption, adjusting system size, or other adaptations.
AES Indiana vs. Duke Energy: Which Indianapolis Utility Do You Have?
Indianapolis's solar landscape involves two major utilities with slightly different service territories and programs. Knowing which serves your address matters for rates, DG export credits, and interconnection processes.
AES Indiana (Formerly Indianapolis Power & Light — IPL)
AES Indiana serves most of Indianapolis proper — the urban core, northside neighborhoods like Broad Ripple, Castleton, and Lawrence, and many southside areas through Beech Grove and Southport. AES Indiana's current residential rate runs approximately 17.42¢/kWh for typical usage tiers. Their DG solar program is administered through the IURC framework with export credits at roughly 25% of retail.
AES Indiana has a community solar program called SolarSPARC that allows Indianapolis customers to subscribe to a share of a solar project without rooftop installation. SolarSPARC subscriptions are available to both residential and commercial AES Indiana customers. The program has been popular — check current availability as subscription capacity has been limited at times.
Duke Energy Indiana
Duke Energy Indiana serves many suburban Indianapolis markets — including Carmel, Noblesville, Westfield, Avon, Plainfield, and areas of Greenwood. Duke's residential rates are similar to AES Indiana's (in the 17–18¢/kWh range), and their DG export structure operates under the same IURC framework with comparably low export credits.
Duke Energy Indiana offers a Green Source Advantage renewable energy program and has explored community solar options in the Indianapolis metro. Their programs evolve; check Duke's Indiana website for current residential solar offerings before installing.
REMC (Rural Electric Member Co-ops)
Portions of the Indianapolis metro — particularly further suburban and exurban areas in Hamilton, Hendricks, and Morgan counties — are served by Rural Electric Member Co-ops (REMCs) rather than AES Indiana or Duke Energy. REMCs operate under different rate structures and their DG solar policies vary. If you're in an REMC service territory, confirm the specific DG export rate and interconnection rules directly with your co-op before getting solar quotes.
Indianapolis Community Solar: The Better Path for Renters and Bad-Policy Survivors
Given Indiana's hostile rooftop solar policy, community solar has become an increasingly attractive alternative — especially for renters, condo owners, and homeowners who simply don't want to lock into an 11–14 year payback on a rooftop system under the current DG rate structure.
AES Indiana SolarSPARC
SolarSPARC is the most direct community solar option for Indianapolis-area AES Indiana customers. Subscribers receive credits on their bill based on their subscribed share of a solar farm's production. The program doesn't require ownership, installation, or long-term commitment comparable to a rooftop purchase. It's not transformative savings, but it provides real bill reduction tied to renewable energy without Indiana's export rate penalty — because in community solar, you're effectively consuming your share's production directly as a bill credit, not exporting it at 25% of retail.
Duke Energy's Renewable Options
Duke Energy Indiana customers can access Green Source Advantage subscriptions for renewable energy. Duke has also participated in Indiana's evolving community solar legislation. Given that Indiana's General Assembly has been slow to enable community solar broadly, check current program availability directly with Duke for suburban Indianapolis customers.
Plug-In Solar for Indianapolis Renters
For Indianapolis renters in neighborhoods like Fountain Square, Bates-Hendricks, Mass Ave corridor apartments, or Mapleton-Fall Creek, plug-in balcony solar offers a no-installation path to reducing electricity costs. Indianapolis averages approximately 4.6 peak sun hours daily annually — decent but not exceptional. A 400W balcony kit generates approximately 550–650 kWh annually in Indianapolis's climate, saving $96–$113/year at AES Indiana's 17.42¢ rate. Payback on a $1,200 kit runs 11–12 years — honest, not thrilling.
Given that Indianapolis solar exports are worth only 4.4¢/kWh while self-consumed solar saves 17.42¢/kWh, adding battery storage transforms the economics. A 13.5 kWh battery stores midday excess production for evening use — converting what would be a low-value export into a high-value self-consumption event. For Indianapolis homeowners seriously considering rooftop solar, the combination of a correctly sized (not oversized) system + battery storage is the strongest economic case available under current policy.
What Indianapolis Solar Costs and What You Actually Get Back
Indianapolis's solar installer market is smaller than Chicago's or Columbus's, reflecting the more difficult policy environment. Fewer installers compete for Indiana business, which means slightly less price competition — but quality firms still serve the market.
| System Size | Installed Cost (incl. 7% IN sales tax) | Annual Production | Annual Savings (high self-consumption) |
|---|---|---|---|
| 5 kW | $13,500–$16,500 | ~6,000 kWh | ~$960–$1,020/yr |
| 7 kW | $18,500–$22,500 | ~8,400 kWh | ~$1,344–$1,428/yr |
| 8 kW | $21,000–$26,000 | ~9,600 kWh | ~$1,536–$1,632/yr |
| Add Battery (13.5 kWh) | +$8,000–$12,000 | — | +$300–$600/yr vs. export-heavy system |
Note: Annual savings assumes 90%+ self-consumption (achievable with battery storage or careful system sizing). Export savings calculated at 4.4¢/kWh. Indiana sales tax included in cost. No federal tax credit (eliminated 2025).
At these figures, an 8 kW system at $23,000 with 90% self-consumption achieves payback in approximately 13–15 years. With a battery adding $10,000 to the cost but improving self-consumption from 75% to 90%+, the battery effectively pays for itself through avoided low-value exports over time — though total system payback extends to 14–17 years. This is the honest picture. Anyone selling you a 7-year payback in Indianapolis is not accounting for Indiana's DG export rate.
Notable Indianapolis-area solar installers:
- Inovateus Solar — South Bend, IN-based firm with Indianapolis metro presence; strong in Indiana market
- Telamon Corporation — Indianapolis-headquartered; works in residential and commercial solar
- Sunrun — national with Indiana coverage; lease/PPA options reduce upfront cost but read export credit treatment carefully
- Harvest Solar — Midwest-focused installer serving Indiana
Indianapolis Solar Production in Indiana's Climate
Indianapolis sits at 39.8° north latitude with a humid continental climate. Like Columbus, it has four real seasons — but Indianapolis is slightly sunnier, averaging approximately 4.6–4.8 peak sun hours annually versus Columbus's 4.5. The difference is modest but real.
Indianapolis gets about 187 sunny days per year (vs. Chicago's 166 and Columbus's ~171). The city's flatness — the entire Indianapolis metro sits on a remarkably flat glacial plain — means rooftop solar installations face no topographic shading and most neighborhoods have consistent south-facing exposure potential. The built environment (trees, neighboring structures) creates more shading than terrain ever would.
Summer thunderstorm season (June–August) brings periodic cloudy periods but also intense sunlight between storms. July is typically Indianapolis's highest-production month. December and January see the lowest production, with gray skies common and solar windows of only 4–5 hours of useful generation.
Indianapolis Neighborhoods with Good Solar Potential
- Carmel and Westfield — newer suburban construction with clean rooflines and south-facing orientations; strong installer presence in Hamilton County
- Zionsville — upscale northwest suburb with good solar adoption and estate-style homes with clear roof exposure
- Geist Reservoir area — newer construction with minimal tree shading on roofs; affluent market with established installer relationships
- Meridian-Kessler and Broad Ripple — urban north Indianapolis with older housing stock; varied roof orientations but strong community interest in solar. Many homes installed pre-2017 are still grandfathered.
- Greenwood and Whiteland — southern suburb with newer subdivisions and good Duke Energy solar relationships