2024 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 phrase "solar incentives" includes a 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. Different kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, might be available to you. Some incentives may be handled by the Illinois government, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:

• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions allow you to ignore the value that your solar panels add when you're calculating the amount of property tax you need to pay on your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are normally handled at the state level. Once your solar system meets the threshold (normally a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you've signed a net metering agreement with your Evanston utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
• Rebates: Solar rebates might be offered by your county or state, or by your local utility company. These rebates work as cash back that is applied after you purchase solar panels and before tax credits are calculated.

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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 solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of the cost of your solar system.

The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006, for you to claim the credit. Initially, the ITC applied to 30% of all system costs (panels, labor, equipment and accessories), although the covered amount has fluctuated over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.

To find out exactly how much the ITC could save you, talk to your local Evanston solar panel installation expert.

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 extends until 2035. You can now apply for a 30% credit for solar systems installed between 2022 and 2032. The credit will then be decreased by a few percentage points every year until the date of expiration. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. Your local Evanston solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Not all solar incentives are federal; rebates, tax credits and more are often offered at the local or state level. These solar incentives — which might be provided by your county or municipality, or by the state of Illinois — could be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Evanston

Solar incentives can be provided by the federal government, the Illinois government or your local utility company. The variety of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Your local Evanston solar panel installer can help you learn more about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.