2023 Solar Incentives Guide for O'Fallon, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in O'Fallon.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in O'Fallon?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Solar incentives mitigate the cost of installing a solar panel system on your home. These financial incentives are designed to encourage more Americans to convert their home partially or fully 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 provided by the state of Illinois or by your utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: You may be able to sign a net metering agreement with your O'Fallon utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
- Rebates: Solar rebates might be offered by your local utility company, or by your state or county. These rebates work as cash back that is applied after you pay for solar panels and before tax credits are calculated.
- Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your home.
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if your solar system produces more than a specified (usually small) amount of electricity. These types of incentives are generally handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you make is generally considered part of your taxable income.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a certain percentage of your solar system's cost.
The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
Reaching out to your local O'Fallon solar panel installation expert is the best way to understand how the ITC 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 new Clean Energy Credit extends until 2035. American homeowners can now receive a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. The credit will then be decreased by a few percentage points every year until its expiration. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. Your local O'Fallon solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more can be offered at a more local level. These incentives — which might be given by your county or municipality, or by the state of Illinois — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in O'Fallon
Solar incentives might come from your local utlity company, the Illinois government or the federal government. The large number of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. If you're prepared to make the switch to solar energy, talking to your local O'Fallon solar panel installation expert is an excellent place to start.
EcoWatch's O'Fallon, IL Solar Incentives FAQs
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.