2025 Solar Incentives Guide for Elmhurst, IL - Tax Credits & Rebates

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

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

The term "solar incentives" refers to a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are handled by the Illinois government or by your specific utility company, county or municipality. Types of solar incentives might include:

• Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Elmhurst utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled at the state level. Once your solar panel system meets the qualification threshold (normally a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you make is usually considered part of your taxable income.
• Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your house.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Rebates: A solar rebate is a partial refund after the purchase of your solar panels. Rebates might be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.

The ITC was originally for 30% of the cost of solar panel installation, although that number has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum claim amount. The ITC applies to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.

Wondering how the ITC applies to your specific situation? Get in touch with your local Elmhurst solar panel installer to get more information.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. The percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit applies to you is to reach out to your local Elmhurst solar panel installation expert with your questions.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. Like with federal incentives, these may include rebates, tax credits and more. These incentives might be distributed by the Illinois government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Elmhurst

The variety of available solar incentives has contributed greatly to the increase in the use of solar power nationwide over the past 15 years. You can get solar incentives from your local utility company, the Illinois government or the federal government. When you're prepared to make the switch to solar energy, calling your local Elmhurst solar panel installation expert is a great first step.