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

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

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

Solar incentives are designed to encourage people to switch their home over to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Different types of incentives, like discounts, cash back or monthly utility bill credits, might be available to you. Some incentives may be handled by the Illinois government, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:

• Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to ignore the value of your solar system when calculating the taxes you pay on your home. They may also include exemptions on sales tax at the time of purchase.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits differ from tax deductions.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are generally handled by your state government. Once your solar system meets a predetermined threshold (normally a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you receive from the sale is usually considered part of your taxable income.
• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. Rebates could be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Net Metering: You may be able to sign a net metering contract with your Douglas utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your utility bill each month.

Federal Solar Incentives

When people think of solar incentives, federal incentives may be the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.

The ITC originally covered 30% of the cost of installing solar panels, although that number has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

To know exactly how much money the ITC could save you, speak with your local Douglas solar panel installation expert.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit extends until 2035. Homeowners can now receive a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This credit will then be decreased by a few percentage points every year until its expiration. Starting in 2023, the 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. The best way to learn more about how the new Clean Energy Credit will apply to you is to speak with your local Douglas solar panel installation expert directly.

State & Local Solar Incentives

Tax credits, rebates and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Incentives might be provided 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 Douglas

Nationwide solar energy use has significantly increased in the past 15 years, in part thanks to the growth in the number of solar incentives. You can obtain these incentives from your local utility company, the federal government or the Illinois government. When you're ready to make the switch to solar energy, calling your local Douglas solar panel installation expert is an excellent place to start.