2024 Solar Incentives Guide for Norridge, IL - Tax Credits & Rebates

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

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

The phrase "solar incentives" broadly refers to financial incentives put in place by solar companies and the government to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. Solar incentives may include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are provided by the federal government, some by the state of Illinois and some by your utility company, county or municipality. Some broad categories of solar incentives include:

• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually come off the total price before tax credits are calculated.
• 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.)
• Tax Exemptions: Tax exemptions may come in 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. This allows you to exclude the added value of your solar system when paying property tax on your home.
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you have in place a net metering agreement with your Norridge utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in others you may get refunded a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are generally handled at the state level. Once your solar panel system meets the qualification threshold (normally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make is usually considered part of your taxable income.

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Federal Solar Incentives

When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. You may have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a certain percentage of the money you spend on your solar system.

The ITC applies to the value of 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. Originally, the ITC covered 30% of all system installation costs (panels, accessories, equipment and labor), although the total amount has fluctuated slightly over the years 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.

Your local Norridge solar panel installer can provide more information about the ITC and how it applies to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. After this, the credit percentage will decrease slightly each year until the end of the program in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Norridge solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Norridge

Solar incentives might come from the Illinois government, the federal government or your local utility company. The variety of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. When you're ready to make the switch to solar energy, talking to your local Norridge solar panel installation expert is a great first step.