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

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

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

The term "solar incentives" refers to financial incentives put in place by solar companies and the government to encourage the use of renewable energy by making the installation and use of solar panels more affordable. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are offered by the state of Illinois or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Your solar panels might qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your home.
• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually come off your total price before any tax credits are calculated.
• 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. Generally, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or similar performance-based incentives. Incentives like these are typically handled at the state level.
• 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 Hampton 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 credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.

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Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of the cost of your solar system.

The ITC applies towards solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can be claimed on a solar panel system 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 the amount you can claim may range between 26-30%. There is no maximum claim amount.

Reaching out to your local Hampton solar panel installer is the best way to learn more about how the ITC could apply to your situation.

The ITC was both renewed and expanded by 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 are now eligible for a 30% credit for solar systems that began installation on or after January 1, 2022, and will be done by December 31, 2032. This credit will then see a slight annual decrease until the date of expiration. Beginning in 2023, it will also be easier to get credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. Your local Hampton solar panel installation experts can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Not all solar incentives are federal; rebates, tax credits and more might also be offered at the state and local level. Certain incentives are offered for only a limited time, while others are ongoing. Local solar incentives could come from your county or municipality, or from the Illinois government.

Next Steps for Installing Solar in Hampton

There are a number of different solar incentives: those provided by the federal government, those provided by the Illinois government and those offered by local utility companies, to name a few. The use of solar energy has grown tremendously in the last 15 years, thanks to these incentives. Speak with your local solar panel installation expert today to learn more and to save the most money possible on a solar system for your Hampton home.