Much of the financial incentive for installing solar panels would be eliminated under a bill approved by the Indiana House.
Solar energy accounts for less than 1 percent of Indiana's power, but utilities worry it could cut into profits if popularity continues to grow.
The bill was approved Tuesday on a 56-43 vote.
Solar panel owners who feed surplus energy to the power grid now are compensated at a retail rate that helps pay off their investments.
Republican Sen. Brandt Hershman's bill would significantly reduce that rate in five years, although it would protect current solar panel owners for 30 years.
The bill already cleared the Senate, which must sign off on changes made in the House.
If they agree, it will be sent to Gov. Eric Holcomb's desk.