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

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

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

The phrase "solar incentives" covers 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. You might be eligible for different types of incentives, such as discounts, cash back 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:

• Rebates: Rebates, or partial refunds after a purchase, are typically applied before any solar tax credits are calculated. Rebates might be provided by your local utility company, by your state or by your county.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Galesburg City utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in others you might be refunded a percentage of the value.
• Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when you are calculating property taxes on your home.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or other performance-based incentives. SRECs and similar incentives are normally handled by your state government.

Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. An incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of your solar system's cost.

The ITC applies towards solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.

Your local Galesburg City solar panel installer can give you more information about the ITC and how it may apply to your situation.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit; the amount will then decrease slightly each year until the end of the current program. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit will apply to you is to reach out to your local Galesburg City solar panel installers with your questions.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more can be offered at a more local level. Some incentives are ongoing, while others are only available for a limited time. Incentives might be provided by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Galesburg City

There are a variety of solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the Illinois government, to name a few. The use of solar energy has increased enormously in the last 15 years, partially due to these incentives. When you're ready to make the change to solar energy, getting in touch with your local Galesburg City solar panel installation expert is an excellent place to start.