2023 Solar Incentives Guide for Champaign City, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Champaign City.
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 City?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
The term "solar incentives" includes a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are provided by the federal government, while others are provided by the state of Illinois or your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: You may be able to sign a net metering agreement with your Champaign City utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your utility bill each month.
- Rebates: Rebates, or partial refunds after a purchase, are typically given prior to any solar tax credits being calculated. Rebates can be given by your local utility company, by your county or by your state.
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a predetermined (generally small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and similar incentives are typically provided 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 Exemptions: Sales tax exemptions are applied at the time of purchase for your solar system. Property tax exemptions let you exclude the value that your solar panels add when you calculate the amount of property tax you need to pay on your home.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. An 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 specific percentage of your solar system's cost.
The ITC covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can apply towards a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim 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.
Contacting your local Champaign City solar panel installer is the best way to understand how the ITC could apply to you.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. This percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. The easiest way to learn more about how the new Clean Energy Credit applies to you is to speak with your local Champaign City solar panel installation expert directly.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. On top of federal solar incentives, there are often state and local ones, too. These incentives — which might be given by the state of Illinois, or by your county or municipality — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Champaign City
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 greatly increase nationwide adoption of solar energy. Contact your local solar panel installer today to discover more about the various programs and to save the most money possible on solar panels for your Champaign City home.
EcoWatch's Champaign City, 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.