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

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

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

Solar incentives are intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. The incentives can include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the Illinois government and some by your utility company, county or municipality. Types of solar incentives might include:

• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Greenwood 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 other areas you may receive a refund equivalent to a percentage of the value.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Rebates: Rebates, or cash back after a purchase, are typically given before any solar tax credits are calculated. Solar rebates may be offered by your local utility company, by your county or by your state.
• Tax Exemptions: These may come in the form of property tax exemptions, which let you ignore the value added by your solar panels when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if you have a solar system that produces more than a specified (typically small) amount of electricity. This category of incentives is typically handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a certain percentage of the money you spend installing solar panels.

The ITC was originally for 30% of the cost of solar system installation, although that number has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum claim amount. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

Wondering how the ITC applies to your specific situation? Reach out to your local Greenwood solar panel installer to get more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners may be eligible for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. Your local Greenwood solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these could include rebates, tax credits and more. Incentives might be given by the state of Illinois, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Greenwood

Solar energy use nationwide has gone up tremendously in the last 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from your local utility company, the Illinois government or the federal government. Talking to your local Greenwood solar panel installation company is an excellent first step towards making sure you get all the incentives you qualify for when you switch to solar energy.