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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. These incentives could include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the state of Illinois and some by your utility company, county or municipality. Types of solar incentives might include:

• Rebates: Solar rebates may be offered by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if the solar system on your home produces over a specified (generally small) amount of electricity. These types of incentives are usually handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you make is normally considered part of your taxable income.
• Net Metering: Net metering factors in once your solar system is up and running. If you have a net metering agreement with your Dundee utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
• Tax Exemptions: Your solar panels may qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your house.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.

The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as labor, accessories and equipment. You can claim this credit 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 claim amount.

Wondering how the ITC applies to your specific situation? Contact your local Dundee solar panel installer to get more information.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Now, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 might qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

More information about the new Inflation Reduction Act can be found here. The easiest way to learn more about how the new Clean Energy Credit might apply to you is to get in touch with your local Dundee solar panel company.

State & Local Solar Incentives

Rebates, tax credits and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones, too. Some incentives are offered for only a limited time, while others are ongoing. These local incentives could come from your county or municipality, or from the Illinois government.

Next Steps for Installing Solar in Dundee

There are many kinds of solar incentives: those given by the federal government, those given by the Illinois government and those given by local utility companies, to name a few. The use of solar energy has grown enormously in the last 15 years, partially due to these incentives. If you're ready to make the switch to solar energy, reaching out to your local Dundee solar panel installation expert is a great first step.