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 intended to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are offered by the state of Illinois or your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Net Metering: You can sign a net metering agreement with your Algonquin utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your monthly utility bill.
• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a specific (generally small) amount of electricity qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically given by your state government. SRECs can be sold to your utility company or another buyer, and this is usually considered part of your taxable income.
• Tax Exemptions: Your solar system could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your home.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Rebates: Rebates, or partial refunds after a purchase, are usually given prior to any solar tax credits being calculated. These rebates might be given by your local utility company, by your state or by your county.

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Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. One of the incentives that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of the cost of your solar system.

The ITC is applied to the total cost of solar panel installation, 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 amount you can claim.

Speaking with your local Algonquin solar panel installer is the best way to learn more about how the ITC could apply to you.

In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The Clean Energy Credit runs until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit. This amount will decrease slightly each year until the end of the current program. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit might apply to you is to get in touch with your local Algonquin solar panel installers.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. As with federal incentives, these could include tax credits, rebates and more. These incentives might be distributed by the Illinois government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Algonquin

The nationwide use of solar energy has significantly increased in the last 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from your local utility company, the federal government or the Illinois government. Your local Algonquin solar panel installation expert can help you learn more about which incentives you should apply for, and get you on track to switch to renewable energy today.