2024 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/

The phrase "solar incentives" includes a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. These incentives might include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are provided by the federal government, some by the Illinois government and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Exemptions: Your solar panels may qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when calculating property taxes on your home.
• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. These might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have a net metering agreement with your Aurora utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in others you might be refunded a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled by your state government. Once your solar system meets the qualification threshold (normally a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you make is generally considered part of your taxable income.

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Federal Solar Incentives

When you think about solar incentives, you probably think of federal incentives first. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of the cost of your solar system.

The ITC initially applied to 30% of the total cost of installing a solar system, although it has fluctuated slightly over the 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, 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 in the United States and owned by you.

Have questions about how the ITC applies to your specific situation? Get in touch with your local Aurora solar panel installer to get more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. Homeowners can now qualify for a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022, and will be finished by the end of 2032. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.

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 applies to you.

State & Local Solar Incentives

Tax credits, rebates and more might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others may only be available for a limited time. They may be provided by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Aurora

There are many types of solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the Illinois government, to name a few. The use of solar energy has increased enormously in the last 15 years, thanks to these incentives. When you're ready to make the switch to solar energy, calling your local Aurora solar panel installation expert is a great first step.