2023 Solar Incentives Guide for Coal Valley, IL - Tax Credits & Rebates

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

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

Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. You may be eligible for several kinds of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Illinois and others from the federal government. Some solar incentives you might qualify for are:

• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if your solar system produces over a specified (usually small) amount of electricity. These types of incentives are normally handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
• Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the government. These are different from tax deductions.
• Rebates: A solar rebate is a partial refund after the purchase of your solar system. Rebates could be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
• Net Metering: You may be able to sign a net metering agreement with your Coal Valley utility company that will apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your monthly utility bill.
• Tax Exemptions: Your solar system may qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when you are calculating property taxes on your house.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. A federal 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 predetermined percentage of your solar system's cost.

The ITC can be applied to solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can be claimed on 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 the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

To understand exactly how much money the ITC could save you, speak with your local Coal Valley solar panel installer.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. You can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This credit will then decrease annually until it expires. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Coal Valley solar panel company can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more might be available at a more local level. The incentives — which might be given by the state of Illinois, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Coal Valley

The variety of solar incentives available has enormously increased the adoption of solar energy nationwide over the last 15 years. You may receive solar incentives from the Illinois government, the federal government or your local utility company. Speaking with your local Coal Valley solar panel installation expert is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.