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

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

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

Solar incentives are meant to encourage homeowners to make the switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Different types of incentives, like discounts, cash back or monthly utility bill credits, might be available to you. Certain incentives may be handled by the state of Illinois, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
• Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your house.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Oswego utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
• Rebates: Solar rebates can be offered by your local utility company, or by your state or county. These rebates work as partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are normally handled at the state level. Once your solar panel system meets the qualification threshold (usually a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you make is generally considered part of your taxable income.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC provides you with a tax credit for a specific percentage of your solar system's cost.

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

Talking to your local Oswego 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 called the Clean Energy Credit. The new Clean Energy Credit extends until 2035. You can now apply for a 30% credit for solar systems installed between 2022 and 2032. The total credit will then decrease annually until its expiration. Beginning in 2023, it will also be easier to claim credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit will apply to you, talk to your local Oswego solar installation expert.

State & Local Solar Incentives

Not all solar incentives are federal; rebates, tax credits and more might also be offered at the state and local level. Incentives might be handled by the state of Illinois, or by your county or municipality. Some incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Oswego

You can apply for solar incentives from the federal government and the Illinois government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Reaching out to your local Oswego solar panel installation expert is a great first step towards getting the most money possible when you switch to solar energy.