2024 Solar Incentives Guide for Lombard, IL - Tax Credits & Rebates

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

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

The term "solar incentives" broadly refers to financial incentives designed to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are handled by the Illinois government or your specific utility company, county or municipality. Categories of solar incentives include:

• Rebates: Solar companies may 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. If you receive a rebate, that amount will usually come off the total price before any tax credits are calculated.
• 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, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or similar performance-based incentives. Incentives like these are generally handled at the state level.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Lombard utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
• Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when paying property tax on your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)

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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 likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a certain percentage of the cost of your solar system.

The ITC applies to the value of 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 you own for you to claim the credit. Originally, the ITC covered 30% of all system costs (panels, equipment, labor and accessories), although the covered amount has fluctuated over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

Speaking with your local Lombard solar panel installer is the best way to learn more about how the ITC applies to your situation.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to 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 2022 and 2032. This new credit will then be decreased by a few percentage points every year until the date of expiration. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit applies to you, speak with your local Lombard solar installation expert.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. Similar to federal incentives, these might include tax credits, rebates and more. Certain incentives are offered for only a limited time, while others are ongoing. Your local solar incentives might come from the Illinois government, or from your specific county or municipality.

Next Steps for Installing Solar in Lombard

You can receive solar incentives from the federal government and the Illinois government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. We suggest talking to your local Lombard solar installation expert to learn more about these incentives and to make sure that you're getting the most money possible for your solar system.