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

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

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

The phrase "solar incentives" refers to financial incentives put in place by solar companies and the government to encourage the adoption and use renewable energy by making solar panels more affordable. Various types of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be provided via the Illinois government, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions allow you to ignore the added value of your solar system when you calculate how much property tax you need to pay on your house.
• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement in place with your Oak Forest utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.
• Rebates: Solar rebates can be offered by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives might be available to you if you have a solar system that produces over a specified (generally small) amount of electricity. This category of incentives is generally handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is normally considered part of your taxable income.

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Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a specified percentage of your solar system's cost.

The ITC was originally for 30% of the cost of installing a solar system, and has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.

To more fully understand how the ITC may apply to you, speak to your local Oak Forest solar panel installer and request more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022, and will be finished by the end of 2032. The credit percentage will then begin to decrease yearly until the Clean Energy Credit expires in 2035. The expansion 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. To fully understand how the new Clean Energy Credit will apply to you, get in touch with your local Oak Forest solar installation expert.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more can be offered at a more local level. Some incentives are ongoing, while others are available for a limited time. Incentives may be given by your county or municipality, or by the Illinois government.

Next Steps for Installing Solar in Oak Forest

Solar incentives may be provided by your local utility company, the Illinois government or the federal government. The large number of incentives available has contributed to a large increase in solar energy use in the last 15 years. It is a good idea to talk to your local Oak Forest solar installation expert to learn more about these incentives and to ensure that you're getting all the money you can for your solar system.