2025 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 encourage homeowners to switch their home over to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. Incentives can include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are provided by the Illinois government or your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when paying property tax on your house.
• Net Metering: Net metering factors in after your solar panels are 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 produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas 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 cash that typically becomes part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are generally handled at the state level.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the government. Tax credits are different from tax deductions.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates could be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.

Federal Solar Incentives

When people think of solar incentives, federal incentives may be the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of your solar system's cost.

The ITC originally covered 30% of the cost of installing solar panels, although that number has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.

To best understand how the ITC could apply to your situation, reach out to your local Addison solar panel installation expert and request more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. Homeowners are now eligible for a credit of 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. The percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems with the new act.

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

State & Local Solar Incentives

Rebates, tax credits and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others are available for a limited time. They may be given by your county or municipality, or by the Illinois government.

Next Steps for Installing Solar in Addison

The variety of available solar incentives has enormously increased the use of solar power nationwide over the past 15 years. You can get solar incentives from the federal government, the Illinois government or from your local utility company. We recommend talking to your local Addison solar installer for more information about these incentives and to make sure that you're getting the most money possible for your solar panels.