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

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

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

Solar incentives are intended to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Various types of incentives, including cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be offered by the state of Illinois, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:

• Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Ludlow 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 may receive a refund equivalent to a percentage of the value.
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions let you exclude the value added by your solar system when you calculate the amount of property tax you need to pay.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled by your state government. Once your solar panel system meets the qualification threshold (generally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make is generally considered part of your taxable income.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. These could 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 tax credits are calculated.
• Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. These differ from tax deductions.

Federal Solar Incentives

When thinking about solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC allows you to claim a tax credit for a set percentage of your solar system's cost.

The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. 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.

Have questions about how the ITC applies to your specific situation? Reach out to your local Ludlow solar panel installation expert to get more information.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. Homeowners can now receive a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. The total credit will then see a slight annual decrease until the date of expiration. The expansion to the program 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. To better understand how the new Clean Energy Credit will apply to you, get in touch with your local Ludlow solar installation expert.

State & Local Solar Incentives

There are more than just federal solar incentives; rebates, tax credits and more are often offered at the state and local level. Certain incentives are ongoing, while others are only available for a limited time. Solar incentives may be offered by your county or municipality, or by the Illinois government.

Next Steps for Installing Solar in Ludlow

Solar incentives can be offered by the federal government, the Illinois government or your local utility company. The growing number of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. Call your local solar panel installation company today to discover more about the various programs and to save as much money as possible on solar panels for your Ludlow home.