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

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

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

Solar incentives mitigate the cost of installing solar panels on your home. This category of financial incentives is designed to encourage more homeowners to make the switch to renewable energy. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are offered by the Illinois government or your utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when calculating property taxes on your house.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (generally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically offered by your state government. SRECs can be sold to your utility company or another buyer, and this is usually considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have in place a net metering agreement with your Normal 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 other places you might make back a percentage of the value.
• Rebates: A rebate is a partial refund given after you've purchased your solar system. These could be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.

Federal Solar Incentives

Federal solar incentives are probably the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC provides a tax credit for a specific percentage of your solar system's cost.

The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006, on a property owned by you for you to claim the credit. The ITC originally paid out 30% of all system installation costs (panels, equipment, labor and accessories), although the amount has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

To better understand exactly how much the ITC could save you, speak with your local Normal solar panel installation expert.

In August 2022, the ITC (now referred to as 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 costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. The percentage will then begin to decrease on a yearly basis until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit might apply to you, get in touch with your local Normal solar installation expert.

State & Local Solar Incentives

Tax credits, rebates and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. These incentives may be offered by the Illinois government, or by your county or municipality. Some are available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Normal

The variety of solar incentives available has contributed greatly to the increase in the adoption of solar energy nationwide over the last 15 years. You may receive solar incentives from your local utility company, the Illinois government or the federal government. Speak with your local solar panel installer today to learn more and to save as much money as possible on a solar system for your Normal home.