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

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

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

The term "solar incentives" covers a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various types of incentives, including cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be handled by the state of Illinois, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:

• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement with your Lincolnwood utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
• 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. In most cases, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or similar performance-based incentives. Incentives like these are generally handled at the state level.
• Rebates: Rebates, or cash back after a purchase, are usually applied prior to any solar tax credits being calculated. Rebates may be offered by your local utility company, by your state or by your county.
• Tax Exemptions: These may come in the form of property tax exemptions, which can let you ignore the value added by your solar panels 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 lower, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. A federal incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a predetermined percentage of the cost of your solar system.

The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as equipment, labor and accessories. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.

To more fully understand how the ITC could apply to your situation, speak to your local Lincolnwood solar panel installation expert and request more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. This percentage will then decrease annually until the Clean Energy Credit expires in 2035. The 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. Your local Lincolnwood solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Tax credits, rebates and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others are available for a limited time. They might be provided by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Lincolnwood

The expanding number of available solar incentives has helped tremendously increase the nationwide adoption of solar energy over the last 15 years. You can get solar incentives from the federal government, the Illinois government or from your local utility company. Your local Lincolnwood solar panel installation company can help you learn more about which incentives you should apply for, and get you on track to switch to renewable energy today.