2025 Solar Incentives Guide for Champaign, IL - Tax Credits & Rebates

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

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

The term "solar incentives" refers to a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are handled by the Illinois government or your utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions let you exclude the added value of your solar system when you calculate the amount of property tax you need to pay on your house.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a predetermined (normally small) amount of electricity can qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically offered at the state level. 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.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
• Net Metering: You can sign a net metering agreement with your Champaign utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your monthly utility bill.
• Rebates: Rebates, or cash back after a purchase, are normally given prior to any solar tax credits being calculated. Rebates might be given by your local utility company, by your state or by your county.

Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. The solar incentive that you're most familiar with is probably 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 the total cost of solar panel installation, including the panels themselves as well as labor, equipment and accessories. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence located in the United States that you own. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.

Wondering how the ITC applies to your specific situation? Get in touch with your local Champaign solar panel installation expert to get more information.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. With the new provisions, solar installation projects that are completed between 2022 and 2032, can qualify for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit might apply to you, reach out to your local Champaign solar installers.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the state and local level. Certain incentives are ongoing, while others might only be available for a limited time. They may be provided by your county or municipality, or by the Illinois government.

Next Steps for Installing Solar in Champaign

Nationwide solar energy use has gone up significantly in the past 15 years, in part due to the proliferation of solar incentives. You might receive these incentives from your local utility company, the federal government or the Illinois government. We suggest talking to your local Champaign solar installation expert to learn more about these incentives and to ensure that you're getting the largest number possible for your solar system.