2025 Solar Incentives Guide for Lake in the Hills, IL - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Lake in the Hills?

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

Solar incentives encourage homeowners to switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Different types of incentives, including discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be offered by the state of Illinois, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually be deducted from your total price before tax credits are calculated.
• Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the government. These are different from tax deductions.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or similar performance-based incentives. These kinds of incentives are generally handled by your state government.
• Net Metering: Be sure to talk to your Lake in the Hills utility company about signing a net metering contract. This allows you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there 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 exclude the value added by your solar system when paying property tax on your house.

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Federal Solar Incentives

When people think of solar incentives, federal incentives might be the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.

The ITC is applied to the total cost of installing solar panels, including the panels themselves as well as accessories, labor and equipment. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. 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 amount you can claim.

To more fully understand how the ITC will apply to your situation, reach out to your local Lake in the Hills solar panel installer and request more information.

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. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; the amount will decrease slightly on a yearly basis until the current program ends. The program expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Lake in the Hills solar panel company can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more can be offered at a more local level. Incentives may be offered by the state of Illinois, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Lake in the Hills

Solar incentives may come from the Illinois government, the federal government or your local utility company. The variety of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Your local Lake in the Hills solar panel installation expert can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.