2024 Solar Incentives Guide for McHenry, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in McHenry.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in McHenry?
Special Assessment for Solar Energy Systems
ComEd - Energy Efficiency Program for Residential
Air Purifier: $50
Clothes Washer: $50
Dehumidifier: $50
Electric Clothes Dryer: $50
Freezer: $50
Refrigerator: $50
Room Air Conditioner: $25
Refrigerator/Freezer Recycling: Free pickup and $50, plus an additional $10 if recycling a room A/C at the same time
Heating & Cooling
Air Source Heat Pump: $400 - $600
Central A/C: $300 - $600
Ductless Mini-Split Heat Pump: $400
Geothermal Heat Pump: Up to $6,000/home
Furnace Blower Motor (ECM): $50 - $100
Miscellaneous
Advanced Power Strip: $10
Air Sealing: Up to $400/home
Attic Insulation: Up to $300/home
Duct Sealing: Up to $500/home
Lighting: In-store discounts, varies
Pool Pump: $275
Smart Thermostat: $100
Wall Insulation: Up to $400/home
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" includes a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different types of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Some incentives may be offered by the Illinois government, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions let you ignore the added value of your solar system when you calculate how much property tax you need to pay on your house.
- Net Metering: Be sure to talk with your McHenry utility company about signing a net metering agreement. This allows you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled at the state level. Once your solar system meets the qualification threshold (normally 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 make from the sale is usually considered part of your taxable income.
- Rebates: Solar rebates can be provided by your local utility company, or by your state or county. These rebates work as cash back that is applied after your purchase of a solar system and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a specified percentage of the money you spend on your solar system.
The ITC initially applied to 30% of the cost of solar system installation, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
To know exactly how much money the ITC could save you, get in touch with your local McHenry solar panel installer.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit runs until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; this amount will then decrease slightly each year until the current program ends. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. Your local McHenry solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Like with federal incentives, these might include tax credits, rebates and more. Some incentives are offered for only a limited time, while others are ongoing. These local incentives could come from the Illinois government, or from your specific county or municipality.
Next Steps for Installing Solar in McHenry
You can receive solar incentives from the Illinois government and the federal government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Talking to your local McHenry solar panel installation company is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's McHenry, IL Solar Incentives FAQs
If my house already has solar panels, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with the company that installed your system, or any local McHenry solar installer, can help you learn more about what incentives you qualify for.
How much can I save annually on my electric bill if I install solar panels on my house in McHenry?
On average, McHenry homeowners who install solar panels save approximately $693.31 per year, or about $13,172.81 over 20 years after making the switch.
What are some of the environmental benefits of switching to solar energy?
Solar energy is a renewable energy source — by switching where you get your energy, you can help lessen the strain on our planet's resources. Solar panels can also reduce the CO2 emissions from your home by 450 pounds a year, or roughly 9,000 pounds over 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly known as the ITC and now named the Clean Energy Credit, is slated to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied could vary depending on which incentives you receive but typically yes, you can receive multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to ensure you are claiming all the incentives you're eligible for and applying them in the correct order.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.