2024 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/

Solar incentives are meant to help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is in place to encourage more Americans to convert their home partially or fully to renewable energy. Different types of incentives, such as cash back, discounts 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 others are federal. Some broad categories of solar incentives include:

• Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when calculating property tax for your home.
• Rebates: Solar rebates might be provided by your state or county, or by your local utility company. These rebates work as cash back that is applied after your purchase of solar panels and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled at the state level. Once your solar system meets a predetermined threshold (generally a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Midlothian utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you may get refunded a percentage of the value.

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Federal Solar Incentives

Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most commonly 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 can be applied to solar systems installed after January 1, 2006, on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost – for panels, accessories, labor and equipment – although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.

Have questions about how the ITC applies to your specific situation? Contact your local Midlothian solar panel installation expert to get more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. Under the new program, solar installation projects started after January 1, 2022, and completed by the end of 2032, might qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit applies to you is to reach out to your local Midlothian solar panel company with your questions.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Midlothian

The large number of available solar incentives has enormously increased the nationwide adoption of solar energy over the past 15 years. You can get solar incentives from the federal government, the Illinois government or from your local utility company. It is a good idea to talk to your local Midlothian solar installer to learn more about these incentives and to be sure that you're getting the most money possible for your solar panels.