2023 Solar Incentives Guide for Chicago Ridge, IL - Tax Credits & Rebates

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

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

The term "solar incentives" covers a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may be eligible for various kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Illinois and others from the federal government. Some broad categories of solar incentives include:

• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off your total price before tax credits are calculated.
• Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, applied when you purchase 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 home.
• Net Metering: You may be able to sign a net metering contract with your Chicago Ridge utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your monthly utility bill.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce over a specific (generally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and the like are typically offered by your state government. 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.

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Federal Solar Incentives

Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC allows you to claim a tax credit for a predetermined percentage of the cost of your solar system.

The ITC initially applied to 30% of the total cost of solar panel installation, and has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.

To more fully understand how the ITC might apply to you, get in touch with your local Chicago Ridge solar panel installation expert and request more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the percentage will be reduced slightly each year until the program expires in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit applies to you, speak with your local Chicago Ridge solar installers.

State & Local Solar Incentives

Not all solar incentives are federal; tax credits, rebates and more are often offered at the local or state level. Some incentives are ongoing, while others are only available for a limited time. They may be offered by your county or municipality, or by the Illinois government.

Next Steps for Installing Solar in Chicago Ridge

There are many kinds of solar incentives: those given by local utility companies, those given by the federal government and those given by the Illinois government, to name a few. Solar energy utilization has grown enormously in the last 15 years, partially due to these incentives. It is a good idea to talk to your local Chicago Ridge solar installation expert for more information about these incentives and to ensure that you're getting all of the money you can for your solar panels.