2023 Solar Incentives Guide for North Aurora, IL - Tax Credits & Rebates

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

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

Solar incentives are meant to encourage people to switch their home over to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. Various kinds of incentives, including discounts, cash back or monthly utility bill credits, might be available to you. Certain incentives may be provided via the state of Illinois, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:

• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. These could be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
• Net Metering: Make sure you talk with your North Aurora utility company about signing a net metering agreement. This allows you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or similar performance-based incentives. These kinds of incentives are generally handled by your state government.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the government. These are different from tax deductions.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when paying property tax on your home.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC covers solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can receive this credit for solar panels installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.

Speaking with your local North Aurora solar panel installation expert is the best way to understand how the ITC applies to you.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. This amount will be decreased slightly on a yearly basis until the end of the current program. Starting in 2023, it will also be easier to qualify for 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 applies to you, reach out to your local North Aurora solar installers.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these may include rebates, tax credits and more. Incentives might be offered by your county or municipality, or by the state of Illinois. Some incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in North Aurora

Solar energy use nationwide has significantly increased in the last 15 years, in part thanks to the increase in availability of solar incentives. You may get these incentives from your local utility company, the Illinois government or the federal government. We suggest talking to your local North Aurora solar installer for more information about these incentives and to ensure that you're getting all of the money you can for your solar panels.