2023 Solar Incentives Guide for Champaign, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Champaign.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Champaign?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Solar incentives encourage homeowners to make the switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are provided by the state of Illinois or by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Net Metering: You can sign a net metering contract with your Champaign utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your utility bill each month.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or other performance-based incentives. These kinds of incentives are normally handled by your state government.
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase 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 home.
- Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually come off your total price before any tax credits are calculated.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits are different from tax deductions.
Federal Solar Incentives
When thinking about solar incentives, federal incentives might be the first thing that comes to mind. A federal incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of your solar system's cost.
The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, equipment, accessories and labor — although the percentage may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.
Speaking with your local Champaign solar panel installation expert is the best way to learn more about how the ITC could apply to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Under the new program, solar installation projects started after January 1, 2022 and completed by the end of 2032 may be eligible for a 30% tax credit. This credit amount will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit might apply to you is to speak with your local Champaign solar panel company directly.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. Like with federal incentives, these may include tax credits, rebates and more. Certain incentives are offered for only a limited time, while others are ongoing. Your local solar incentives might come from the Illinois government, or from your specific county or municipality.
Next Steps for Installing Solar in Champaign
You can qualify for solar incentives from the federal government and the Illinois government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Reaching out to your local Champaign solar panel installation expert is the best first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Champaign, IL Solar Incentives FAQs
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.