2023 Solar Incentives Guide for Douglas, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Douglas.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Douglas?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to encourage people to make the switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Various kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be offered by the Illinois government, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:
- Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when paying taxes on your house. You could also look for exemptions on sales tax at the time of purchase.
- Rebates: A rebate is a partial refund given after you've purchased your solar panels. Rebates could be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before calculating tax credits.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that normally counts as part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or other performance-based incentives. SRECs and similar incentives are generally handled by your state government.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Net Metering: You can sign a net metering contract with your Douglas utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your monthly utility bill.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of the cost of your solar system.
The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.
Your local Douglas solar panel installation expert can provide you with more information about the ITC and how it might apply to your situation.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. You can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. The credit will then be decreased by a few percentage points every year until its expiration. The program 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 understand how the new Clean Energy Credit might apply to you is to speak with your local Douglas solar panel company directly.
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. Incentives may be handled by your county or municipality, or by the state of Illinois. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Douglas
The nationwide use of solar energy has increased enormously in the last 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the Illinois government or the federal government. Speaking with your local Douglas solar panel installation expert is the best first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Douglas, IL Solar Incentives FAQs
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