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

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

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

Solar incentives are intended to encourage homeowners to switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Different types of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Certain incentives may be provided via the Illinois government, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:

• Tax Exemptions: Your solar system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when you are calculating property taxes on your home.
• 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. Typically, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or other performance-based incentives. These kinds of incentives are generally handled by your state government.
• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually come off your total price before tax credits are calculated.
• Net Metering: Be sure to talk with your Lynwood utility company about signing a net metering agreement. This allows you to receive credit towards your utility bill every month for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. Tax credits are different from tax deductions.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on your solar system.

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

To more fully understand how the ITC could apply to your situation, contact your local Lynwood solar panel installation expert and ask for more information.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The new Clean Energy Credit extends until 2035. You 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 credit will then be decreased by a few percentage points every year until its expiration. 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 learn more about how the new Clean Energy Credit will apply to you is to reach out to your local Lynwood solar panel installers with your questions.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these could include tax credits, rebates and more. Incentives might be offered by the state of Illinois, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Lynwood

The nationwide use of solar energy has gone up significantly in the past 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the Illinois government or the federal government. Getting in touch with your local Lynwood solar panel installation company is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.