2023 Solar Incentives Guide for Canton, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Canton.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Canton?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" generally refers to financial incentives put in place by solar companies and the government to encourage the use of renewable energy by making installing and using solar panels more affordable. Solar incentives can include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the Illinois government and some by your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before calculating tax credits.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions let you exclude the value that your solar panels add when you calculate how much property tax you need to pay on your house.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you've signed a net metering agreement with your Canton utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives might be available to you if you have a solar system that produces over a specified (typically small) amount of electricity. This category of incentives is generally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you make is normally considered part of your taxable income.
- 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.)
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of your solar system's cost.
The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to claim the credit. Originally, the ITC covered 30% of all system costs (panels, equipment, labor and accessories), although this amount has fluctuated over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Your local Canton solar panel installation expert can provide you with more information about the ITC and how it might apply to your situation.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The new Clean Energy Credit now runs until 2035. You are now eligible for a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. This credit will then see a slight annual decrease until the date of expiration. Starting in 2023, it will also be easier to claim credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit might apply to you, reach out to your local Canton solar installation expert.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more might be available at a more local level. Incentives might be provided by the state of Illinois, or by your county or municipality. Some incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Canton
The expanding number of available solar incentives has helped tremendously increase the nationwide adoption of solar energy over the past 15 years. You might qualify for solar incentives from the federal government, the Illinois government or from your local utility company. If you're prepared to make the change to solar energy, calling your local Canton solar panel installation expert is an excellent place to start.
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EcoWatch's Canton, IL Solar Incentives FAQs
Can I get any financial incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives are intended to apply to a property you own that is located within the United States, and most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend reaching out to your local solar installer and/or tax professional to fully understand what incentives apply to your specific situation.
I already have solar panels. Does my system qualify for any incentives?
You should plan to talk to a representative from the company that installed your system — or reach out to a local Canton solar installer — to learn about which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will solar panels save me annually on my electric bill in Canton?
After adding solar panels to your home in Canton, you can expect to save around $701.98 per year, or around $13,337.55 over the next 20 years.
Can I receive incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order your incentives will be applied in may vary depending on which incentives you are claiming but usually yes, you can receive multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to make sure you are claiming all the incentives you are eligible for and applying them in the correct order.
Can I use multiple types of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home, such as a combination of geothermal and solar. You can also use both renewable energy sources and a non-renewable backup source of energy. You should discuss your plan with your local Canton solar panel installer, to make sure you know what you'll need and what kinds of incentives you will or won't qualify for.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.