2023 Solar Incentives Guide for Effingham, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Effingham.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Effingham?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. These financial incentives are designed to encourage more homeowners to switch to renewable energy. You might qualify for different types of incentives, such as 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. Some broad categories of solar incentives include:
- Rebates: A solar rebate is a partial refund given after you've purchased your solar system. These might be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Tax Exemptions: Your solar system might qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value added by your solar panels when calculating property taxes on your house.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the federal government. These differ from tax deductions.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if your solar system produces over a specified (generally small) amount of electricity. Performance-based incentives are normally handled by the state government. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
- Net Metering: You may be able to sign a net metering agreement with your Effingham utility company. This agreement may 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 utility bill each month.
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
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- Excellent reputation
- Doesn't offer solar batteries
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of your solar system's cost.
The ITC initially applied to 30% of the cost of installing solar panels, and has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To more fully understand how the ITC will apply to your situation, get in touch with your local Effingham solar panel installation expert and ask for more information.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. With the new provisions, 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 decrease slightly each year until the current Clean Energy Credit expires in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit might apply to you, reach out to your local Effingham solar installation expert.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more may be offered at the local or state level. Some incentives are ongoing, while others are only available for a limited time. Solar incentives might be provided by the Illinois government, or by your county or municipality.
Next Steps for Installing Solar in Effingham
There are a number of different solar incentives: those provided by the federal government, those provided by the Illinois government and those provided by local utility companies, to name a few. Solar energy utilization has grown enormously in the last 15 years, partially due to these incentives. Your local Effingham solar panel installation company can help you learn more about which incentives you can apply for, and get you on track to switch to renewable energy today.
EcoWatch's Effingham, IL Solar Incentives FAQs
If I installed solar panels on my house a few years ago, can I still claim incentives?
Your best bet is to talk to the company that installed your solar panels — or call a local Effingham solar installer — to better understand which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Who installs solar panels near me?
To discover the top solar panel installers near you, read our article on the top solar companies in Effingham.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any benefits I can claim?
With the passage of the new Inflation Reduction Act, there are several new financial incentives that are available when you make eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on which incentives you are receiving, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to verify that you are claiming incentives correctly and that you're getting the most money possible.
Can I use solar and another type of renewable energy in combination to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to discuss your ideas with your local Effingham solar installer. They can help you as you plan for your project and give you an understanding of various incentives that you might or might not qualify for.
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.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.