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

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

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

Solar incentives are meant to help mitigate the cost of installing solar panels on your home. Financial incentives like these are designed to encourage more homeowners to switch their home over to renewable energy. Various types of incentives, like discounts, cash back or credit towards your monthly utility bill, may be available to you. Certain incentives may be offered by the Illinois government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:

• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Markham utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in others you might receive a refund equivalent to a percentage of the value.
• Rebates: Solar rebates may be provided by your state or county, or by your local utility company. These rebates work as partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when calculating property tax for your house.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled by your state government. Once your solar system meets a predetermined threshold (usually a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive is generally considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of the cost of your solar system.

The ITC covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. This credit can be claimed on solar panels installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

Contacting your local Markham solar panel installer is the best way to understand how the ITC could apply to your situation.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it 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 decrease slightly on a yearly basis until the current program ends. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. Your local Markham solar panel installation experts can answer your questions and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

Not all solar incentives are federal; rebates, tax credits and more may be offered at the local or state level. Some incentives are ongoing, while others might only be available for a limited time. These incentives may be offered by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Markham

There are a variety of solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the Illinois government, to name a few. Solar energy utilization has increased tremendously in the last 15 years, thanks to these incentives. Your local Markham solar panel installation company can help you learn more about which incentives you should apply for, and get you feeling good about making the change to renewable energy today.