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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Solar incentives could include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of Illinois and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:

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

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC offers a tax credit for a set percentage of your solar system's cost.

The ITC applies to the total cost of installing solar panels, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.

Your local Homer solar panel installer can provide more information about the ITC and how it applies to your situation.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners may be eligible for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. The expansion to the program 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. The best way to understand how the new Clean Energy Credit might apply to you is to get in touch with your local Homer solar panel company.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Like with federal incentives, these may include tax credits, rebates and more. Incentives might be offered by the state of Illinois, or by your county or municipality. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Homer

There are a number of different solar incentives: those provided by the federal government, those provided by the Illinois government and those provided by local utility companies, to name a few. Solar energy use has increased enormously in the last 15 years, partially thanks to these incentives. It is a good idea to talk to your local Homer solar installer for more information about these incentives and to be sure that you're getting the largest number possible for your solar panels.