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

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

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

The phrase "solar incentives" generally refers to financial incentives put in place by solar companies and the government to encourage people to use renewable energy by making the installation and use of solar panels more affordable. The incentives could include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the Illinois government and some by your utility company, county or municipality. Types of solar incentives might include:

• Net Metering: You may be able to sign a net metering agreement with your Elk Grove utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your monthly utility bill.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• 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. In most cases, a certain (small) threshold of energy production must be met before your solar system qualifies for SRECs or other performance-based incentives. Incentives like these are typically handled by your state government.
• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from your total price before any tax credits are calculated.
• Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when calculating property taxes on your home.

Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. You may have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a predetermined percentage of the money you spend on your solar system.

The ITC is applied to the total cost of installing a solar system, including the panels themselves as well as labor, equipment and accessories. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

To better understand how the ITC may apply to your situation, call your local Elk Grove solar panel installer and ask for more information.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit now runs until 2035. You can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. The credit will then decrease annually until it expires. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit will apply to you, get in touch with your local Elk Grove solar installers.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more can be offered at a more local level. These solar incentives — which may be given by your county or municipality, or by the state of Illinois — may be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Elk Grove

You can qualify for solar incentives from the Illinois government and the federal government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. Speak with your local solar panel installation expert today to discover more about the various programs and to save the most money possible on solar panels for your Elk Grove home.