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

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

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

Solar incentives are designed to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are handled by the state of Illinois or your utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are usually handled at the state level. Once your solar panel system meets a predetermined threshold (usually a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make from the sale is usually considered part of your taxable income.
• Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions let you ignore the added value of your solar system when you're calculating the amount of property tax you need to pay on your home.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Homewood utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from the total price before tax credits are calculated.

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Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a certain percentage of the money you spend on solar panels for your home.

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 system must have been installed after January 1, 2006, on a property you own for you to claim the credit. The ITC originally paid out 30% of all system costs (panels, labor, accessories and equipment), although the covered amount has fluctuated 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 claim amount.

Have questions about how the ITC applies to your specific situation? Reach out to your local Homewood solar panel installer to get more information.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. Homeowners can now apply for a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. The total credit will then see a slight annual decrease until it expires. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit will apply to you, get in touch with your local Homewood solar installation company.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Homewood

Solar incentives can be provided by your local utility company, the Illinois government or the federal government. The variety of available incentives has helped nationwide use of solar energy increase greatly in the last 15 years. Talking to your local Homewood solar panel installer is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.