2025 Solar Incentives Guide for Jersey, IL - Tax Credits & Rebates

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

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

Solar incentives are intended to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are handled by the Illinois government or by your utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Exemptions: Tax exemptions may come in 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, which allows you to ignore the value added by your solar system when calculating property tax for your house.
• Rebates: A rebate is a partial refund given after you've purchased your solar panels. These could 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 calculating tax credits.
• 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.)
• Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Jersey utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are generally handled at the state level. Once your solar system meets the qualification threshold (usually a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you make is usually considered part of your taxable income.

Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a specified percentage of the cost of your solar system.

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

To best understand how the ITC will apply to your situation, reach out to your local Jersey solar panel installer and ask for more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. With the new provisions, solar installation projects begun after January 1, 2022, and finished by December 31, 2032, may be eligible for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Jersey solar panel company can answer any questions you have and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Jersey

Solar energy use nationwide has increased enormously in the last 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from the federal government, the Illinois government or your local utility company. We suggest talking to your local Jersey solar installation company to learn more about these incentives and to ensure that you're getting all the money you can for your solar system.