2024 Solar Incentives Guide for Algonquin, IL - Tax Credits & Rebates

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

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

Solar incentives are designed to encourage people to make the switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Various kinds of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be handled by the state of Illinois, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:

• Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Algonquin utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (normally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically offered at the state level. You can sell SRECs to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
• Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your home.
• 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 solar rebate is a partial refund credited to your account after you've paid for your solar system. Rebates might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.

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Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides 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 solar system installation, and has fluctuated slightly over the last few years 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 claim amount. The ITC can be applied to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.

Reaching out to your local Algonquin solar panel installation expert is the best way to learn more about how the ITC could apply to your situation.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. Homeowners can now qualify for a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before 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 claim credits for energy storage systems under this new program.

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

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more can be offered at a more local level. Some incentives are offered for only a limited time, while others are ongoing. Your local incentives might come from the Illinois government, or from your specific county or municipality.

Next Steps for Installing Solar in Algonquin

You can qualify for solar incentives from the Illinois government and the federal government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Your local Algonquin solar panel installer can give you more information about which incentives you might qualify for, and get you feeling good about making the change to renewable energy today.