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

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

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

Solar incentives are meant to encourage people to make the switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are provided by the Illinois government or your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Rebates: A rebate is a partial refund after the purchase of your solar panels. These might be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Aurora utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you may make back a percentage of the value.
• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when calculating how much property tax you need to pay on your house.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if you have a solar system that produces more than a specified (typically small) amount of electricity. This category of incentives is usually handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you make is generally considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.

Federal Solar Incentives

When thinking about solar incentives, you probably 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 gives you a credit on your taxes equal to a specified percentage of your solar system's cost.

The ITC initially applied to 30% of the total cost of installing a solar system, although it 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 total cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. 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 owned by you and in the United States.

To best understand how the ITC may apply to your situation, get in touch with your local Aurora solar panel installation expert and request more information.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can receive a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Starting in 2023, the 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. Your local Aurora solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Not all solar incentives are federal; tax credits, rebates and more are often offered at the state and local level. Some incentives are ongoing, while others may only be available for a limited time. They might be given by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Aurora

There are a variety 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. Solar energy use has increased tremendously in the last 15 years, partially thanks to these incentives. Your local Aurora solar panel installation company can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.