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

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

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

Solar incentives are designed to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are offered by the state of Illinois or by your utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
• Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the added value of the solar panels when calculating property taxes on your house.
• Net Metering: Net metering factors in once your solar system is up and running. If you have a net metering agreement in place with your Northlake utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
• 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. If you receive a rebate, that amount will usually be deducted from the total price before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (normally small) amount of electricity qualify for SRECs or other similar performance-based incentives. SRECs and similar incentives are typically offered by your state government. SRECs can be sold to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.

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Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC offers a tax credit for a specific percentage of the cost of your solar system.

The ITC covers solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can apply towards a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.

Have questions about how the ITC applies to your specific situation? Get in touch with your local Northlake solar panel installer to get more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). Now, solar installation projects begun after January 1, 2022, and finished by December 31, 2032, might qualify for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit will apply to you, speak with your local Northlake solar installation company.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. As with federal incentives, these may include tax credits, rebates and more. Some incentives are offered for only a limited time, while others are ongoing. Your local incentives may come from the Illinois government, or from your specific county or municipality.

Next Steps for Installing Solar in Northlake

The expanding number of solar incentives available has contributed greatly to the increase in the adoption of solar energy nationwide over the past 15 years. You may receive solar incentives from the Illinois government, the federal government or your local utility company. It is a good idea to talk to your local Northlake solar installation expert for more information about these incentives and to ensure that you're getting the largest number possible for your solar system.