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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Different kinds of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be provided via the Illinois government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:

• Net Metering: Net metering becomes relevant once your solar system is up and running. If you've signed a net metering agreement with your Grayslake utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other places you might receive a refund equivalent to a percentage of the value.
• 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.)
• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar system. Property tax exemptions let you exclude the value added by your solar system when you calculate how much property tax you need to pay on your house.
• Rebates: A solar rebate is a partial refund after the purchase of your solar panels. These could be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are generally handled at the state level. Once your solar panel system meets a predetermined threshold (generally a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on solar panels for your home.

The ITC applies to the value of solar panels 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. Originally, the ITC covered 30% of all system costs (panels, accessories, labor and equipment), although the total amount has fluctuated over the last few 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 claim amount.

To more fully understand how the ITC might apply to you, reach out to your local Grayslake solar panel installer and ask for more information.

The ITC has been renewed and expanded following 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. American homeowners can now apply for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. The credit will then be decreased by a few percentage points every year until it expires. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Grayslake solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it will 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 could include tax credits, rebates and more. Incentives may be offered by your county or municipality, or by the state of Illinois. Some incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Grayslake

You can receive solar incentives from the federal government and the Illinois government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. When you're ready to make the change to solar energy, reaching out to your local Grayslake solar panel installation expert is an excellent place to start.