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

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

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

The term "solar incentives" covers a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are provided by the state of Illinois or your utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the added value of the solar panels when calculating property taxes on your home.
• Rebates: Rebates, or partial refunds after a purchase, are typically applied before any solar tax credits are calculated. Solar rebates may be given by your local utility company, by your county or by your state.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if the solar system on your home produces more than a specified (generally small) amount of electricity. This category of incentives is normally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you make is usually considered part of your taxable income.
• Net Metering: Don't forget to speak to your Lake Villa utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
• 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

When people think of solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides a tax credit for a set percentage of your solar system's cost.

The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006 on a property owned by you for you to claim the credit. The ITC initially covered 30% of all system costs (panels, equipment, accessories and labor), although the covered amount has fluctuated slightly 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 amount you can claim.

To best understand how the ITC may apply to you, reach out to your local Lake Villa solar panel installation expert and ask for more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. American homeowners can now apply for a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. This new credit will then see a slight annual decrease until its expiration. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. The easiest way to understand how the new Clean Energy Credit applies to you is to reach out to your local Lake Villa solar panel installers with your questions.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more might be available at a more local level. Certain incentives are ongoing, while others might only be available for a limited time. Solar incentives might be given by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Lake Villa

There are a number of different solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the Illinois government, to name a few. Solar energy use has grown tremendously in the last 15 years, partially due to these incentives. If you're ready to switch over to solar energy, getting in touch with your local Lake Villa solar panel installation expert is an excellent place to start.