2024 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 intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Various kinds of incentives, such as discounts, cash back or monthly utility bill credits, might be available to you. Certain incentives may be provided via the Illinois government, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a threshold (generally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and similar incentives are typically offered by your state government. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
• Net Metering: You may be able to sign a net metering agreement with your Dixon utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.
• Rebates: Solar rebates can be provided by your local utility company, or by your county or state. These rebates work as partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
• Tax Exemptions: Your solar panel system might qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when calculating property taxes on your house.
• 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.)

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Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of your solar system's cost.

The ITC covers solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.

Your local Dixon solar panel installation expert can provide more information about the ITC and how it might apply to your situation.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. 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 be decreased slightly on a yearly basis until the end of the current program. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

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 installers.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more can be offered at a more local level. These solar incentives — which might be provided by your county or municipality, or by the state of Illinois — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Dixon

The large number of available solar incentives has enormously increased the nationwide adoption of solar energy over the last 15 years. You may receive solar incentives from the federal government, the Illinois government or from your local utility company. Your local Dixon solar panel installer can provide you with more details about which incentives you should apply for, and get you on track to switch to renewable energy today.