2023 Solar Incentives Guide for Addison, IL - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Addison?

Source: https://www.dsireusa.org/

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. You might qualify for several types of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Illinois and others from the federal government. Categories of solar incentives include:

• Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Addison utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system can earn SRECs or similar performance-based incentives. These kinds of incentives are typically handled by your state government.
• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from the total price before tax credits are calculated.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
• Tax Exemptions: These could come in the form of property tax exemptions, which allow you to ignore the value of your solar system when calculating the taxes you pay on your house. You could also look for exemptions on sales tax at the time of purchase.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.

The ITC applies to the total cost of installing solar panels, including the panels themselves as well as accessories, equipment and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.

Talking to your local Addison solar panel installation expert is the best way to learn more about how the ITC may apply to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. At this point, the percentage will be reduced slightly each year until the program expires in 2035. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit will apply to you is to talk with your local Addison solar panel installers.

State & Local Solar Incentives

Tax credits, rebates and more might be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones as well. These solar incentives — which may be handled by your county or municipality, or by the state of Illinois — may be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Addison

There are many types of solar incentives: those given by the federal government, those given by the Illinois government and those given by local utility companies, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially due to these incentives. If you're prepared to make the change to solar energy, talking to your local Addison solar panel installation expert is an excellent place to start.