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

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

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

The term "solar incentives" generally refers to financial incentives that are in place to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. You may be eligible for several kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Illinois government and others from the federal government. Some solar incentives you might qualify for are:

• Tax Exemptions: These might come in the form of property tax exemptions, which allow you to ignore the value of your solar system when calculating the taxes you pay on your house. You could also look for exemptions on sales tax at the time of purchase.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the federal government. These differ from tax deductions.
• Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates could be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are normally handled by your state government. Once your solar system meets the qualification threshold (typically a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you make is generally considered part of your taxable income.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have in place a net metering agreement with your Loves Park 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 other areas you may receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. A federal incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specific percentage of your solar system's cost.

The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost — for panels, equipment, labor and accessories — although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.

Curious how the ITC might apply to your specific situation? Reach out to your local Loves Park solar panel installation expert to get more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now qualify for a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then begin to decrease yearly until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems with the new act.

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 get in touch with your local Loves Park solar panel installation expert.

State & Local Solar Incentives

Rebates, tax credits and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Some incentives are ongoing, while others are offered for only a limited time. These local incentives could come from the Illinois government, or from your specific county or municipality.

Next Steps for Installing Solar in Loves Park

You can apply for solar incentives from the federal government and the Illinois government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. Talking to your local Loves Park solar panel installer is a great first step towards getting all the incentives you qualify for when you switch to solar energy.