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

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

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

The term "solar incentives" refers to financial incentives implemented by the government and by solar companies to encourage people to use renewable energy by making the installation and use of solar panels more affordable. You may qualify for various types of incentives, such as discounts, cash back 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:

• Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions let you exclude the added value of your solar system when calculating how much property tax you need to pay on your house.
• Rebates: Solar rebates can be offered by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you pay for solar panels and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (generally small) amount of electricity qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically offered at the state level. SRECs can be sold to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have in place a net metering agreement with your Evanston utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in others you might receive a refund equivalent to a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a certain percentage of the money you spend on your solar system.

The ITC applies towards solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. This credit can apply towards solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.

Wondering how the ITC applies to your specific situation? Reach out to your local Evanston solar panel installation expert to get more information.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called 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 be decreased by a few percentage points every year until its expiration. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit might apply to you, talk to your local Evanston solar installation company.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these may include tax credits, rebates and more. These incentives — which might be provided by the state of Illinois, or by your county or municipality — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Evanston

Solar incentives may be provided by the Illinois government, the federal government or your local utility company. The variety of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. We recommend talking to your local Evanston solar installation expert to learn more about these incentives and to make sure that you're getting the largest number possible for your solar panels.