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

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

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

Solar incentives help mitigate the cost of installing a solar panel system on your home. These financial incentives are designed to encourage more Americans to switch to renewable energy. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, while others are handled by the Illinois government or your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. Rebates could be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
• Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement in place with your Machesney 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 places, this is a dollar-for-dollar credit, while in other areas you may be refunded a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or similar performance-based incentives. SRECs and similar incentives are normally handled at the state level.
• Tax Exemptions: Your solar panel system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when you are calculating property taxes on your house.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a predetermined percentage of the money you spend on solar panels for your home.

The ITC was originally for 30% of the total cost of installing solar panels, although that number has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum amount you can claim. The ITC can be applied to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

Your local Machesney Park solar panel installer can offer more information about the ITC and how it may apply to your situation.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will then decrease slightly each year until the end of the current program. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Machesney Park solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more may be available at a more local level. These incentives may be handled by the Illinois government, or by your county or municipality. Certain incentives are available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Machesney Park

There are many types of solar incentives: those given by the federal government, those given by the Illinois government and those given by local utility companies, to name a few. The use of solar energy has increased tremendously in the last 15 years, thanks to these incentives. Your local Machesney Park solar panel installer can help you learn more about which incentives you should apply for, and get you on track to switch to renewable energy today.