2023 Solar Incentives Guide for Chatham, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Chatham.
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 Chatham?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Solar incentives are meant to help mitigate the cost of installing solar panels on your home. Financial incentives like these are designed to encourage more homeowners to convert their home partially or fully to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, while others are offered by the state of Illinois or by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: You may be able to sign a net metering agreement with your Chatham utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if your solar system produces more than a specified (typically small) amount of electricity. Performance-based incentives are normally handled at the state level. You can sell SRECs to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
- Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually come off your total price before tax credits are calculated.
- Tax Exemptions: These might come in the form of property tax exemptions, which would allow you to exclude the value added by your solar panels when calculating the taxes you pay on your house. They may also include exemptions on sales tax at the time of purchase.
- 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. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of the cost of your solar system.
The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.
Your local Chatham solar panel installer can offer more information about the ITC and how it might 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). With the new provisions, solar installation projects that are completed between 2022 and 2032 may be eligible for a 30% tax credit. This credit amount will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Beginning 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. Your local Chatham solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more are often offered at the local or state level. Certain incentives are ongoing, while others may only be available for a limited time. They might be provided by the Illinois government, or by your county or municipality.
Next Steps for Installing Solar in Chatham
Solar incentives might be offered by the federal government, the Illinois government or your local utility company. The growing number of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Your local Chatham solar panel installer can give you more information about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.
EcoWatch's Chatham, 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.