2025 Solar Incentives Guide for Chatham, IL - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Chatham?

Source: https://www.dsireusa.org/

The term "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. These incentives can include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the state of Illinois and some by your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
• Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your house.
• Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from the total price before tax credits are calculated.
• Net Metering: Don't forget to speak with your Chatham utility company about signing a net metering contract. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or other performance-based incentives. These kinds of incentives are normally handled at the state level.

Federal Solar Incentives

When thinking about solar incentives, federal incentives might be the first thing that comes to mind. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of the cost of your solar system.

The ITC applies to solar systems installed after January 1, 2006, on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost – for panels, accessories, labor and equipment – although that amount may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.

Contacting your local Chatham solar panel installer is the best way to learn more about how the ITC could apply to your situation.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022, and completed by the end of 2032. After this, the percentage will decrease slightly each year until the program expires in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. Your local Chatham solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Rebates, tax credits and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones as well. These incentives — which may be provided by your county or municipality, or by the state of Illinois — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Chatham

Nationwide solar energy use has gone up tremendously in the last 15 years, in part thanks to the increase in availability of solar incentives. You can obtain these incentives from your local utility company, the Illinois government or the federal government. Your local Chatham solar panel installation company can provide you with more details about which incentives you should apply for, and get you started on the path to switching to renewable energy today.