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

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

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Solar incentives encourage people to make the switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are offered by the state of Illinois or by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have in place a net metering agreement with your Decatur utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
• 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. Performance-based incentives are generally handled at the state level. You can sell SRECs to your utility company or other buyers, and the money you make is normally considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions allow you to ignore the value that your solar panels add when calculating the amount of property tax you need to pay.
• Rebates: Rebates, or cash back after a purchase, are typically given before any solar tax credits are calculated. Rebates may be given by your local utility company, by your county or by your state.

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC provides you with a tax credit for a set percentage of the cost of your solar system.

The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006, on a property you own for you to be eligible for the credit. Initially, the ITC applied to 30% of all costs (panels, accessories, equipment and labor), although the covered amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.

Speaking with your local Decatur solar panel installer is the best way to learn more about how the ITC may apply to you.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. After this, the percentage will be reduced slightly each year until the end of the program in 2035. The program expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Decatur solar panel installation experts can answer your questions and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more might be available at a more local level. These incentives may be provided by the Illinois government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Decatur

Nationwide solar energy use has gone up tremendously in the last 15 years, in part thanks to the increase in availability of solar incentives. You may get these incentives from the federal government, the Illinois government or your local utility company. If you're prepared to switch over to solar energy, calling your local Decatur solar panel installation expert is an excellent place to start.