2024 Solar Incentives Guide for Calumet City, IL - Tax Credits & Rebates

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

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

Solar incentives are meant to encourage homeowners to make the switch to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. You might be eligible for different types of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Illinois government and others from the federal government. Some broad categories of solar incentives include:

• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions let you exclude the value added by your solar system when calculating the amount of property tax you need to pay on your home.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are usually handled at the state level. Once your solar panel system meets a predetermined threshold (usually a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you make from the sale is usually considered part of your taxable income.
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you have in place a net metering agreement with your Calumet City utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you might make back a percentage of the value.
• Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. These differ from tax deductions.
• Rebates: Your solar installer might help you claim a rebate, or partial refund of your 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 tax credits are calculated.

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Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. The solar incentive that you may be most familiar with is 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 applies to solar systems installed after January 1, 2006, on a primary or secondary residence in the United States that you own. Originally, the tax credit was for 30% of the total cost – for panels, labor, equipment and accessories – although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.

Curious how the ITC might apply to your specific situation? Reach out to your local Calumet City solar panel installer to get more information.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. This percentage will then begin to decrease yearly until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit will apply to you, talk to your local Calumet City solar installation expert.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Calumet City

The expanding number of solar incentives available has enormously increased the adoption of solar energy nationwide over the past 15 years. You might qualify for solar incentives from your local utility company, the Illinois government or the federal government. If you're ready to make the switch to solar energy, talking to your local Calumet City solar panel installation expert is a great first step.