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

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

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

Solar incentives are designed to encourage people to switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. You may qualify for different kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, 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. Some solar incentives you might qualify for are:

• 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, you must meet a certain (small) threshold of energy production before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are typically handled by your state government.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have a net metering agreement with your Dixon utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other places you may make back a percentage of the value.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. The value of a rebate will usually come off your total price before tax credits are calculated.
• Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when you are calculating property taxes on your house.
• Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the government. Tax credits are different from tax deductions.

Federal Solar Incentives

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

The ITC applies 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, labor and accessories – although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.

To better understand how the ITC will apply to your situation, reach out to your local Dixon solar panel installation expert and ask for more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. This percentage will then decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit applies to you, speak with your local Dixon solar installation expert.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these might include rebates, tax credits and more. Incentives might be offered by the state of Illinois, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Dixon

There are a number of different solar incentives: those given by the federal government, those provided by the Illinois government and those provided by local utility companies, to name a few. The use of solar energy has increased enormously in the last 15 years, partially due to these incentives. We recommend talking to your local Dixon solar installer to learn more about these incentives and to make sure that you're getting the most money possible for your solar system.