2023 Solar Incentives Guide for East Lincoln, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in East Lincoln.
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 East Lincoln?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Solar incentives are meant to encourage homeowners to make the switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. You might be eligible for several types of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Illinois government and others from the federal government. Types of solar incentives might include:
- Net Metering: Net metering factors in after your solar system is up and running. If you have in place a net metering agreement with your East Lincoln utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions allow you to ignore the added value of your solar system when you're calculating how much property tax you need to pay on your house.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or other performance-based incentives. Incentives like these are typically handled at the state level.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. Rebates might 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 tax credits are calculated.
Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of your solar system's cost.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006 for you to claim the credit. Initially, the ITC applied to 30% of all system costs (panels, accessories, equipment and labor), although the amount has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.
Reaching out to your local East Lincoln solar panel installation expert is the best way to understand how the ITC could apply to you.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit runs 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 then decrease slightly each year until the end of the current program. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit applies to you, get in touch with your local East Lincoln solar installers.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these may include tax credits, rebates and more. Incentives may be handled by your county or municipality, or by the state of Illinois. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in East Lincoln
Solar energy use nationwide has significantly increased in the past 15 years, in part due to the proliferation of solar incentives. You may get these incentives from your local utility company, the Illinois government or the federal government. Speaking with your local East Lincoln solar panel installation company is a great first step towards getting the most money possible when you switch to solar energy.
EcoWatch's East Lincoln, IL Solar Incentives FAQs
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.