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

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

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

The phrase "solar incentives" includes a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different kinds of incentives, like cash back, discounts or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by the state of Illinois, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:

• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Typically, you must meet a certain (small) threshold of energy production before your solar system can earn SRECs or similar performance-based incentives. These kinds of incentives are normally handled by your state government.
• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates might 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 calculating tax credits.
• Tax Exemptions: Your solar system might qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when you are calculating property taxes on your house.
• Net Metering: Make sure you talk to your Harlem utility company about signing a net metering agreement. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)

Federal Solar Incentives

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

The ITC can be credited towards the value of a solar system 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. The ITC originally paid out 30% of all system costs (panels, accessories, equipment and labor), although the amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

To best understand how the ITC could apply to your situation, speak to your local Harlem solar panel installation expert and request more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; this amount will decrease slightly on a yearly basis until the end of the current program. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. Your local Harlem solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more may be available at a more local level. The incentives — which might be given by your county or municipality, or by the state of Illinois — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Harlem

There are a number of different solar incentives: those offered by local utility companies, those offered by the Illinois government and those offered by the federal government, to name a few. The use of solar energy has grown enormously in the last 15 years, partially due to these incentives. Your local Harlem solar panel installation expert can give you more information about which incentives you may qualify for, and get you on track to switch to renewable energy today.