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

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

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

Solar incentives are intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. You might be eligible for different types of incentives, such as cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Illinois and others from the federal government. Some broad categories of solar incentives include:

• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement with your Freeport utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you might receive a refund equivalent to a percentage of the value.
• Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. Rebates might be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a specific (normally small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically provided at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Tax Exemptions: Your solar system may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the value added by your solar panels when calculating property taxes on your home.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)

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Federal Solar Incentives

Federal solar incentives are probably the first thing that you think of when thinking about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.

The ITC covers solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. You can claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. The original claim amount was 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.

Reaching out to your local Freeport solar panel installation expert is the best way to understand how the ITC applies to you.

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 is valid until 2035. You can now receive a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This credit will then see a slight annual decrease until the date of expiration. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. Your local Freeport 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

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

Next Steps for Installing Solar in Freeport

Solar incentives might be provided by your local utility company, the federal government or the Illinois government. The large number of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Your local Freeport solar panel installer can provide you with more details about which incentives you may qualify for, and get you on track to switch to renewable energy today.