2023 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" covers a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. These incentives could include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of Illinois and some by your specific utility company, county or municipality. Types of solar incentives might include:

• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions let you ignore the value that your solar panels add when you're calculating the amount of property tax you need to pay on your home.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system qualifies for SRECs or other performance-based incentives. SRECs and similar incentives are normally handled at the state level.
• Rebates: Rebates, or cash back after a purchase, are usually given before any solar tax credits are calculated. Solar rebates may be offered by your local utility company, by your county or by your state.
• Net Metering: Make sure you talk to your Elmwood Park utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.

The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all costs (panels, equipment, labor and accessories), although the total amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

To best understand how the ITC might apply to you, reach out to your local Elmwood Park solar panel installer and request more information.

The ITC was both renewed and expanded by 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 can qualify for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Elmwood Park solar panel installer can answer your questions and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these might include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives could come from the Illinois government, or from your specific county or municipality.

Next Steps for Installing Solar in Elmwood Park

Solar incentives can be offered by the federal government, the Illinois government or your local utility company. The growing number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. It is a good idea to talk to your local Elmwood Park solar installer for more information about these incentives and to ensure that you're getting the largest number possible for your solar system.