2023 Solar Incentives Guide for East St Louis, IL - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in East St Louis?

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. You may be eligible for several kinds of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Illinois government and others from the federal government. Some broad categories of solar incentives include:

• Rebates: Solar rebates can be provided by your state or county, or by your local utility company. These rebates work as cash back that is applied after you purchase a solar system and before tax credits are calculated.
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement in place with your East St Louis utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in others you might receive a refund equivalent to a percentage of the value.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled at the state level. Once your solar system meets a predetermined threshold (usually a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
• Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when calculating property tax for your home.

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 commonly known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of your solar system's cost.

The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property owned by you for you to claim the credit. Originally, the ITC covered 30% of all costs (panels, equipment, accessories and labor), although the total amount has fluctuated over time 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.

Your local East St Louis solar panel installation expert can give you more information about the ITC and how it may apply to your situation.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit lasts 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 decrease slightly on a yearly basis until the current program ends. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local East St Louis solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more can be offered at a more local level. Certain incentives are ongoing, while others are available for a limited time. Solar incentives might be offered by your county or municipality, or by the Illinois government.

Next Steps for Installing Solar in East St Louis

Solar incentives might be provided by your local utility company, the federal government or the Illinois government. The variety of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Your local East St Louis solar panel installer can give you more information about which incentives you can apply for, and get you started on the path to switching to renewable energy today.