Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Nashville?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Solar incentives encourage people to make the switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Solar incentives can include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the Illinois government and some by your specific utility company, county or municipality. Types of solar incentives might include:
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from the total price before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled by your state government. Once your solar panel system meets a predetermined threshold (generally 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 is generally considered part of your taxable income.
- Net Metering: Net metering factors in once your solar panels are up and running. If you have in place a net metering agreement with your Nashville utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other areas you may get refunded a percentage of the value.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions let you exclude the value that your solar panels add when calculating how much property tax you need to pay on your home.
Federal Solar Incentives
When someone says "solar incentives," you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides a tax credit for a specific percentage of the cost of your solar system.
The ITC initially applied to 30% of the total cost of installing solar panels, and has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost 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.
Wondering how the ITC applies to your specific situation? Get in touch with your local Nashville solar panel installer to get more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then begin to decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. Your local Nashville solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these could include tax credits, rebates and more. Incentives may be given by your county or municipality, or by the state of Illinois. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Nashville
Solar incentives can be provided by the Illinois government, the federal government or your local utility company. The variety of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. When you're ready to switch over to solar energy, getting in touch with your local Nashville solar panel installation expert is an excellent place to start.
EcoWatch's Nashville, IL Solar Incentives FAQs
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.