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

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

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

Solar incentives are meant to help mitigate the cost of installing solar panels on your home. These financial incentives are in place to encourage more people to switch their home over to renewable energy. You might be eligible for various kinds of incentives, such as cash back, discounts or monthly utility bill credits, depending on your situation. Certain 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:

• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a predetermined (usually small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically provided by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have a net metering agreement with your Harrisburg utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you may receive a refund equivalent to a percentage of the value.
• 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 added by your solar panels when you are calculating property taxes on your home.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually come off your total price before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)

Federal Solar Incentives

Federal solar incentives are likely the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC allows you to claim a tax credit for a set percentage of your solar system's cost.

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

To more fully understand how the ITC might apply to you, speak to your local Harrisburg solar panel installation expert and ask for more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now dubbed the Clean Energy Credit. With the new provisions, solar installation projects that are completed between 2022 and 2032 might qualify for a 30% tax credit. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit might apply to you is to reach out to your local Harrisburg solar panel installation expert with your questions.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. As with federal incentives, these could include rebates, tax credits and more. The incentives — which might be provided by the state of Illinois, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Harrisburg

Solar incentives may come from the federal government, the Illinois government or your local utility company. The variety of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. If you're ready to switch over to solar energy, reaching out to your local Harrisburg solar panel installation expert is an excellent place to start.