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

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

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

The term "solar incentives" refers to financial incentives designed to encourage people to use renewable energy by making the installation and use of solar panels more affordable. The incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of Illinois and some by your utility company, county or municipality. Categories of solar incentives include:

• Net Metering: Net metering factors in once your solar system is up and running. If you have a net metering agreement with your Bloomington City utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other areas you may receive a refund equivalent to a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are generally handled by your state government. Once your solar panel system meets the 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 receive from the sale is usually considered part of your taxable income.
• Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when paying property tax on your home.
• Rebates: Rebates, or partial refunds after a purchase, are normally given before any solar tax credits are calculated. Solar rebates can be given by your local utility company, by your county or by your state.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)

Federal Solar Incentives

Federal solar incentives are likely the first thing that comes to mind when you think about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.

The ITC applies to the total cost of solar system installation, including the panels themselves as well as labor, accessories and equipment. 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. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.

Talking to your local Bloomington City solar panel installation expert is the best way to understand how the ITC could apply to you.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. Homeowners can now receive a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. The credit will then see a slight annual decrease until the date of expiration. The program expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

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

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. Like with federal incentives, these can include rebates, tax credits and more. These incentives may be given out by the Illinois government, or by your county or municipality. Some are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Bloomington City

Solar energy use nationwide has significantly increased in the past 15 years, in part due to the proliferation of solar incentives. You can obtain these incentives from the Illinois government, the federal government or your local utility company. We recommend talking to your local Bloomington City solar installer for more information about these incentives and to be sure that you're getting the most money possible for your solar system.