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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are provided by the Illinois government or your utility company, county or municipality. Some broad categories of solar incentives include:

• Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Highland Park utility company, the company 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 might receive a refund equivalent to a percentage of the value.
• Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your house.
• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a predetermined (normally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and similar incentives are typically offered by your state government. You can sell SRECs to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Rebates: A rebate is a partial refund given after you've purchased your solar panels. These might be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the federal government. These differ from tax deductions.

Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a predetermined percentage of the money you spend on your solar system.

The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, labor, equipment and accessories — although the percentage may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

Your local Highland Park solar panel installation expert can provide you with more information about the ITC and how it might 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 Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit; this amount will be decreased slightly each year until the current program ends. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Highland Park solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Rebates, tax credits and more might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. Incentives might be given by your county or municipality, or by the state of Illinois. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Highland Park

The nationwide use of solar energy has increased enormously in the past 15 years, in part thanks to the increase in availability of solar incentives. You can obtain these incentives from your local utility company, the Illinois government or the federal government. Talking to your local Highland Park solar panel installer is a great first step towards making sure you get all the incentives you qualify for when you switch to solar energy.