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

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

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

The term "solar incentives" covers a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may qualify for several types of incentives, such as discounts, cash back or monthly utility bill credits, 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. You might qualify for any of the following types of solar incentives:

• Net Metering: You may be able to sign a net metering contract with your Columbia utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your monthly utility bill.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
• Rebates: Rebates, or partial refunds after a purchase, are normally applied before any solar tax credits are calculated. Solar rebates may be offered by your local utility company, by your state or by your county.
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions allow you to ignore the value that your solar panels add when calculating how much property tax you need to pay.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (normally small) amount of electricity will qualify for SRECs or other similar performance-based incentives. SRECs and similar incentives are typically given at the state level. You can sell SRECs to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. You may have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.

The ITC can be applied to solar panels installed after January 1, 2006, on a primary or secondary residence in the United States that you own. Originally, the tax credit was for 30% of the total cost – for panels, equipment, accessories and labor – although that amount may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.

To better understand how the ITC could apply to your situation, call your local Columbia solar panel installer and ask for more information.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; the amount will be decreased slightly each year until the end of the current program. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. The easiest way to learn more about how the new Clean Energy Credit might apply to you is to speak with your local Columbia solar panel installers directly.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the local or state level. Certain incentives are ongoing, while others might only be available for a limited time. These incentives might be given by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Columbia

The expanding number of available solar incentives has contributed greatly to the increase in the use of solar power nationwide over the last 15 years. You might qualify for solar incentives from your local utility company, the federal government or the Illinois government. Your local Columbia solar panel installer can give you more information about which incentives you might qualify for, and get you feeling good about making the change to renewable energy today.