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

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

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

The term "solar incentives" refers broadly to financial incentives that are in place to encourage people to use renewable energy by making solar panels more affordable. Incentives can include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are handled by the state of Illinois or by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. In most cases, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or similar performance-based incentives. SRECs and similar incentives are typically handled at the state level.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Libertyville utility company, the company 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 other places you might receive a refund equivalent to a percentage of the value.
• Rebates: Solar rebates might be provided by your state or county, or by your local utility company. These rebates work as partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
• Tax Exemptions: These could come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
• Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the government. These differ from tax deductions.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC provides a tax credit for a set percentage of your solar system's cost.

The ITC is applied to the total cost of solar panel installation, 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, as long as it 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.

Wondering how the ITC applies to your specific situation? Contact your local Libertyville solar panel installer to get more information.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The new Clean Energy Credit extends until 2035. You can now receive a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This credit will then see a slight annual decrease until it expires. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.

More information about the new Inflation Reduction Act can be found here. Your local Libertyville solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. Similar to federal incentives, these could include tax credits, rebates and more. Some incentives are ongoing, while others are only available for a limited time. Solar incentives may be provided by your county or municipality, or by the Illinois government.

Next Steps for Installing Solar in Libertyville

Solar energy use nationwide has increased enormously in the last 15 years, in part thanks to the proliferation of solar incentives. You might receive these incentives from your local utility company, the Illinois government or the federal government. Your local Libertyville solar panel installation expert can provide you with more details about which incentives you can apply for, and get you on track to switch to renewable energy today.