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
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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
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.
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
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.