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

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

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

The phrase "solar incentives" broadly refers to financial incentives implemented by the government and by solar companies to encourage people to use renewable energy by making solar panels more affordable. Different types of incentives, like discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by 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: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there 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 added value of your solar system when calculating property tax for your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are typically handled by your state government. Once your solar system meets the qualification threshold (typically a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you receive is generally considered part of your taxable income.
• Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement with your Palos Heights utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

When you think about solar incentives, you probably 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 specific percentage of the cost of your solar system.

The ITC can be applied to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost — for panels, equipment, labor and accessories — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.

To more fully understand how the ITC may apply to you, speak to your local Palos Heights solar panel installer and ask for more information.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar systems installed between 2022 and 2032. At this point, the credit percentage will decrease slightly each year until the program expires in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit might apply to you is to get in touch with your local Palos Heights solar panel installers.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. Like with federal incentives, these might include tax credits, rebates and more. The incentives — which might be provided by your county or municipality, or by the state of Illinois — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Palos Heights

Solar energy use nationwide has gone up significantly in the last 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from your local utility company, the federal government or the Illinois government. Speak with your local solar panel installation company today to find out more information and to save the most money possible on solar panels for your Palos Heights home.