2025 Solar Incentives Guide for Midlothian, IL - Tax Credits & Rebates

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

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

The phrase "solar incentives" broadly refers to financial incentives designed to encourage people to use renewable energy by making solar panels more affordable. Different kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, might 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. Categories of solar incentives include:

• Tax Exemptions: These can come in the form of property tax exemptions, which would allow you to exclude the value added by your solar panels when calculating the taxes you pay on your house. You could also look for exemptions on sales tax at the time of purchase.
• Rebates: Solar rebates may be offered by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after you purchase solar panels and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or similar performance-based incentives. These kinds of incentives are generally handled by your state government.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
• Net Metering: Make sure you talk with your Midlothian utility company about signing a net metering contract. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.

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Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of the cost of your solar system.

The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006, on a property you own for you to be eligible for the credit. The ITC originally paid out 30% of all system installation costs (panels, equipment, labor and accessories), although the covered amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.

To more fully understand how the ITC may apply to you, get in touch with your local Midlothian solar panel installation expert and ask for more information.

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. Now, solar installation projects started after January 1, 2022, and completed by the end of 2032, may be eligible for a 30% tax credit. This credit amount will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.

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

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more may be offered at the local or state level. Some incentives are ongoing, while others are offered for only a limited time. These local incentives may come from the Illinois government, or from your specific county or municipality.

Next Steps for Installing Solar in Midlothian

The nationwide use of solar energy has significantly increased in the past 15 years, in part due to the growth in the number of solar incentives. You might receive these incentives from your local utility company, the Illinois government or the federal government. We suggest talking to your local Midlothian solar installer for more information about these incentives and to make sure that you're getting the largest number possible for your solar panels.