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
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 March 14, 2023
Why you can trust EcoWatch
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
The phrase "solar incentives" includes 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. Different types of incentives, like cash back, discounts or credit towards your monthly utility bill, may be available to you. Some incentives may be offered by the Illinois government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. Tax credits are different from tax deductions.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (generally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically provided by your state government. You can sell SRECs to your utility company or another buyer, and this is usually considered part of your taxable income.
- Net Metering: You may be able to sign a net metering agreement with your Champaign utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. These could be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions let you ignore the value that your solar panels add when calculating the amount of property tax you need to pay on your house.
Federal Solar Incentives
When thinking about solar incentives, federal incentives might be the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.
The ITC covers solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. You can receive this credit for solar panels installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.
Reaching out to your local Champaign solar panel installation expert is the best way to understand how the ITC applies to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. Homeowners can now qualify for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then decrease yearly until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit applies to you, get in touch with your local Champaign solar installation expert.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more are often offered at the local or state level. These incentives may be provided by your county or municipality, or by the Illinois government. Some are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Champaign
Solar energy use nationwide has significantly increased in the last 15 years, in part due to the increase in availability of solar incentives. You might receive these incentives from the Illinois government, the federal government or your local utility company. If you're ready to make the change to solar energy, talking to your local Champaign solar panel installation expert is an excellent place to start.
Best Solar Financing
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- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries (coming 2022)
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
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- Customer service varies by local dealer
EcoWatch's Champaign, IL Solar Incentives FAQs
Can I get any financial incentives when I add solar panels to a rental property, vacation home or commercial property?
While we recommend talking to your local solar installer and/or tax professional to best understand what solar incentives apply to you, many incentives apply to a second home, as long as it is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the details.
How can I learn if I qualify for different solar incentives?
Generally, solar incentives apply to:
- a new solar system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the Illinois government or by your county/municipality, may have additional qualifications. Speak with your local Champaign solar installer to find out what incentives your project may qualify for.
How much can I save annually on my electric bill if I add solar panels to my Champaign home?
Typically, homeowners in Champaign who install solar panels save around $702.26 per year, or around $13,342.97 over 20 years after making the switch.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied could vary depending on which incentives you are claiming but usually yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to be sure you are claiming all possible incentives and applying them in the correct order.
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.