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

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

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

Solar incentives mitigate the cost of installing a solar panel system on your home. These financial incentives are intended to encourage more people to switch their home over to renewable energy. These incentives may include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of Illinois and some by your utility company, county or municipality. Some solar incentives you might qualify for are:

• Rebates: Rebates, or cash back after a purchase, are typically applied prior to any solar tax credits being calculated. These rebates can be offered by your local utility company, by your state or by your county.
• 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): SRECs can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. Typically, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or other performance-based incentives. These kinds of incentives are normally handled by your state government.
• Tax Exemptions: Your solar panel system could qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your house.
• Net Metering: You may be able to sign a net metering agreement with your Collinsville 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.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specified percentage of your solar system's cost.

The ITC applies towards solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can claim this credit for a solar panel system installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.

Speaking with your local Collinsville solar panel installer is the best way to learn more about how the ITC applies to you.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. This percentage will then decrease on a yearly basis until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit might apply to you, get in touch with your local Collinsville solar installation company.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more might be available at a more local level. Some incentives are ongoing, while others are available for a limited time. They might be offered by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Collinsville

Nationwide solar energy use has gone up significantly in the last 15 years, in part due to the increase in availability of solar incentives. You may get these incentives from your local utility company, the Illinois government or the federal government. It is a good idea to talk to your local Collinsville solar installation expert to learn more about these incentives and to make sure that you're getting all the money you can for your solar panels.