2023 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 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.