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

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

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

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.