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

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

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

Solar incentives mitigate the cost of installing solar panels on your home. This category of financial incentives is in place to encourage more homeowners to switch their home over to renewable energy. Various kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Certain incentives may be handled by the state of Illinois, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:

• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Centralia utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you might be refunded a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
• Tax Exemptions: Your solar panels might qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when calculating property taxes on your house.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off your total price before any tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a specific (usually small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and similar incentives are typically offered by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of the cost of your solar system.

The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property owned by you for you to claim the credit. The ITC initially covered 30% of all installation costs (panels, labor, accessories and equipment), although the amount has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.

Have questions about how the ITC applies to your specific situation? Get in touch with your local Centralia solar panel installation expert to get more information.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as the Clean Energy Credit. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can apply for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. Your local Centralia solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Rebates, tax credits and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. These incentives might be distributed 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 Centralia

There are many kinds of solar incentives: those given by local utility companies, those given by the federal government and those given by the Illinois government, to name a few. The use of solar energy has grown tremendously in the last 15 years, thanks to these incentives. If you're prepared to make the change to solar energy, talking to your local Centralia solar panel installation expert is an excellent place to start.