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

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

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

Solar incentives mitigate the cost of installing a solar panel system on your home. These financial incentives are designed to encourage more homeowners to make the switch to renewable energy. You might qualify for several kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Illinois government and others from the federal government. Categories of solar incentives include:

• Rebates: A solar rebate is a partial refund after the purchase of your solar panels. Rebates 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 Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when you are calculating property taxes on your house.
• Net Metering: Net metering factors in after your solar system is up and running. If you have in place a net metering agreement with your Kewanee utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (usually small) amount of electricity will qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically offered by your state government. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.

Federal Solar Incentives

Federal solar incentives are probably the first thing that comes to mind when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC offers a tax credit for a specific percentage of your solar system's cost.

The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all system costs (panels, equipment, labor and accessories), although the covered amount has fluctuated over the last few years 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.

Your local Kewanee solar panel installer can offer more information about the ITC and how it may apply to your situation.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After this, the percentage will decrease slightly each year until the end of the program in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit might apply to you is to talk with your local Kewanee solar panel installers.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Kewanee

Solar incentives can be provided by the federal government, the Illinois government or your local utility company. The large number of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. When you're ready to switch over to solar energy, reaching out to your local Kewanee solar panel installation expert is an excellent place to start.