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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are provided by the Illinois government or your utility company, county or municipality. Some solar incentives you might qualify for are:

• Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. These might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if your solar system produces over a specified (typically small) amount of electricity. Performance-based incentives are generally handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you make is normally considered part of your taxable income.
• Tax Exemptions: Your solar system may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when calculating property taxes on your house.
• Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement with your Limestone utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you might receive a refund equivalent to a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. An incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of the cost of your solar system.

The ITC applies to the total cost of solar panel installation, including the panels themselves as well as equipment, accessories and labor. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.

Contacting your local Limestone solar panel installation expert is the best way to learn more about how the ITC may apply to you.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Under the new program, solar installation projects started after January 1, 2022 and completed by the end of 2032 may be eligible for a 30% tax credit. The amount of the credit will then see a slight annual decrease 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, beginning in 2023.

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

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. As with federal incentives, these can include rebates, tax credits and more. These incentives — which might be provided by the state of Illinois, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Limestone

Solar incentives can come from the Illinois government, the federal government or your local utility company. The large number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. When you're ready to make the change to solar energy, calling your local Limestone solar panel installation expert is an excellent place to start.