2024 Solar Incentives Guide for Elmwood Park, IL - Tax Credits & Rebates

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

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

The phrase "solar incentives" refers to a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are offered by the state of Illinois or your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your house.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Net Metering: Make sure you speak with your Elmwood Park utility company about signing a net metering agreement. This allows you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (generally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically offered at the state level. SRECs can be sold to your utility company or another buyer, and this is usually considered part of your taxable income.
• Rebates: A rebate is a partial refund after the purchase of your solar system. These may be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.

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Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. 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 set percentage of the cost of your solar system.

The ITC originally covered 30% of the cost of installing a solar system, and has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC can be applied 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.

Talking to your local Elmwood Park solar panel installer is the best way to learn more about how the ITC may apply to you.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Under the new program, solar installation projects begun after January 1, 2022, and finished by December 31, 2032, may be eligible for a 30% tax credit. This percentage will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. The expansion also makes it easier to get credit for energy storage systems, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Elmwood Park solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Rebates, tax credits and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others are offered for only a limited time. Your local solar incentives may come from your county or municipality, or from the Illinois government.

Next Steps for Installing Solar in Elmwood Park

The nationwide use of solar energy has gone up tremendously in the past 15 years, in part due to the growth in the number of solar incentives. You might receive these incentives from your local utility company, the federal government or the Illinois government. When you're ready to switch over to solar energy, calling your local Elmwood Park solar panel installation expert is a great first step.