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

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

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

The phrase "solar incentives" refers to financial incentives designed to encourage increased use of renewable energy by making solar panels more affordable. These incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of Illinois and some by your specific utility company, county or municipality. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled at the state level. Once your solar panel system meets the qualification threshold (usually a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.
• Tax Exemptions: Your solar system may 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 exclude the value that solar panels add when calculating property taxes on your house.
• Rebates: A solar rebate is a partial refund after the purchase of your solar panels. These may be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Palos Hills utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.

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Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.

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

Contacting your local Palos Hills solar panel installer is the best way to understand how the ITC could apply to you.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. The credit percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit might apply to you, reach out to your local Palos Hills solar installation expert.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more may be available at a more local level. These incentives — which might be provided by the state of Illinois, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Palos Hills

You can apply for solar incentives from the Illinois government and the federal government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Speak with your local solar panel installation expert today to discover more about the various programs and to save the most money possible on a solar system for your Palos Hills home.