2023 Solar Incentives Guide for Clear Lake, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Clear Lake.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Clear Lake?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
City Water Light and Power - Residential Energy Efficiency Rebate Programs
Geothermal Heat Pump: $500/ton
Rain Barrel: $25
High Efficiency Toilet: $50
Water Heater: $200 - $400
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" refers to a 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. The incentives might include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of Illinois and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement in place with your Clear Lake utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are normally handled at the state level. Once your solar panel system meets a predetermined threshold (generally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
- Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your house.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates may be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC offers a tax credit for a predetermined percentage of the cost of your solar system.
The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC originally paid out 30% of all system installation costs (panels, equipment, accessories and labor), although the total amount has fluctuated slightly over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
To more fully understand how the ITC might apply to you, speak to your local Clear Lake solar panel installation expert and ask for more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit runs until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will then decrease slightly on a yearly basis until the current program ends. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit might apply to you, speak with your local Clear Lake solar installers.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. As with federal incentives, these could include rebates, tax credits and more. The incentives — which may be given 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 Clear Lake
Solar incentives might be offered by your local utlity company, the Illinois government or the federal government. The large number of available incentives has helped nationwide use of solar energy increase greatly in the last 15 years. If you're prepared to switch over to solar energy, talking to your local Clear Lake solar panel installation expert is an excellent place to start.
EcoWatch's Clear Lake, IL Solar Incentives FAQs
How can I learn if I qualify for certain solar incentives?
It's best to speak with your local Clear Lake solar installer to get an understanding of which incentives your project will qualify for. In most cases, solar incentives apply to new solar systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, such as those given by the state of Illinois, might have other requirements.
If I installed solar panels on my house a few years ago, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the exact installation date. Speaking with the company that installed your system, or any local Clear Lake solar installer, can help you learn what incentives you can apply for.
How much can I save on my electric bill annually if I add solar panels to my Clear Lake home?
On average, Clear Lake homeowners who install solar panels save approximately $839.43 per year, or approximately $15,949.13 over 20 years after they make the switch.
What are some environmental benefits of adding solar panels to my home?
Solar energy is a renewable energy source — by switching where you get your energy, you can help reduce the strain on our planet's resources. A solar system can also lower the CO2 emissions from your home by 500 pounds annually, or around 13,000 pounds over 20 years.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of solar panels. Depending on precisely which incentives you are eligible for, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to verify that you are claiming the correct incentives and that you're getting the most money possible.
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.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.