2023 Solar Incentives Guide for Crystal Lake, IL - Tax Credits & Rebates

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

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

Solar incentives are meant to encourage people to switch their home over to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Different kinds of incentives, including discounts, cash back or monthly utility bill credits, may be available to you. Certain incentives may be offered by the state of Illinois, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:

• 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. In most cases, a certain (small) threshold of energy production must be met before your solar system qualifies for SRECs or similar performance-based incentives. Incentives like these are normally handled by your state government.
• Rebates: Solar rebates can be offered by your state or county, or by your local utility company. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
• Tax Exemptions: Tax exemptions may 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 value added by your solar system when calculating property tax for your house.
• Net Metering: You may be able to sign a net metering agreement with your Crystal Lake utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your utility bill each month.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a set 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 system has to have been installed after January 1, 2006 on a property owned by you for you to be eligible for the credit. The ITC initially covered 30% of all system installation costs (panels, equipment, labor and accessories), although the covered amount has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.

To better understand how the ITC may apply to your situation, get in touch with your local Crystal Lake solar panel installation expert and request more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can receive a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. The expansion 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. The best way to learn more about how the new Clean Energy Credit applies to you is to talk with your local Crystal Lake solar panel installation expert.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these may include rebates, tax credits and more. These incentives might be given out by your county or municipality, or by the Illinois government. Some incentives may be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Crystal Lake

Nationwide solar energy use has increased enormously in the past 15 years, in part thanks to the growth in the number of solar incentives. You might receive these incentives from the federal government, the Illinois government or your local utility company. We recommend talking to your local Crystal Lake solar installation company for more information about these incentives and to make sure that you're getting the most money possible for your solar system.