2023 Solar Incentives Guide for Collinsville, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Collinsville.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Collinsville?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Solar incentives are intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are provided by the federal government, while others are offered by the state of Illinois or your utility company, county or municipality. Categories of solar incentives include:
- Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when paying property tax on your home.
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the federal government. These differ from tax deductions.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or similar performance-based incentives. SRECs and similar incentives are generally handled by your state government.
- Rebates: Solar rebates may be provided by your local utility company, or by your state or county. These rebates work as cash back that is applied after you pay for solar panels and before tax credits are calculated.
- Net Metering: Be sure to speak to your Collinsville utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.
The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.
Your local Collinsville solar panel installation expert can offer more information about the ITC and how it applies to your situation.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. This amount will decrease slightly on a yearly basis until the end of the current program. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit will apply to you, speak with your local Collinsville solar installers.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more might be available at a more local level. Incentives may be offered by the state of Illinois, or by your county or municipality. Certain incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Collinsville
Solar incentives might come from your local utility company, the federal government or the Illinois government. The variety of incentives available has contributed to a large increase in solar energy use in the last 15 years. If you're prepared to make the switch to solar energy, talking to your local Collinsville solar panel installation expert is a great first step.
EcoWatch's Collinsville, IL Solar Incentives FAQs
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.