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

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

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

Solar incentives are intended to encourage homeowners to make the switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. You may be eligible for several kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Illinois and others from the federal government. Some solar incentives you might qualify for are:

• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if your solar system produces more than a specified (typically small) amount of electricity. Performance-based incentives are generally handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
• Tax Exemptions: These might come in the form of property tax exemptions, which let you exclude the value added by your solar panels when paying taxes on your house. They may also include exemptions on sales tax at the time of purchase.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement in place with your Batavia utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you might make back a percentage of the value.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of your solar system's cost.

The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.

To understand exactly how much the ITC could save you, contact your local Batavia solar panel installation expert.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). Homeowners can now receive 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 credit percentage will then decrease annually until the Clean Energy Credit ends in 2035. The program expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Batavia solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. Like with federal incentives, these may include rebates, tax credits and more. These incentives might be given out 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 Batavia

There are a number of different solar incentives: those given by local utility companies, those given by the Illinois government and those given by the federal government, to name a few. Solar energy utilization has increased enormously in the last 15 years, partially thanks to these incentives. Speak with your local solar panel installation company today to learn more and to save the most money possible on a solar system for your Batavia home.