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/

Solar incentives are designed to mitigate the cost of installing solar panels on your home. Financial incentives like these are intended to encourage more homeowners to switch their home over to renewable energy. These incentives may include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the Illinois government and some by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are normally handled by your state government. Once your solar system meets a certain threshold (normally 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.
• Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when calculating the taxes you pay on your house. You could also look for exemptions on sales tax at the time of purchase.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually come off the total price before any tax credits are calculated.
• Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Palos Hills 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 make back a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)

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Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of your solar system's cost.

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

Your local Palos Hills solar panel installer can give you more information about the ITC and how it applies to your situation.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. You can now apply for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This credit will then be decreased by a few percentage points every year until the date of expiration. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, get in touch with your local Palos Hills solar installation company.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Palos Hills

Solar incentives may come from the federal government, the Illinois government or your local utility company. The large number of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. Speaking with your local Palos Hills solar panel installation expert is a great first step towards getting all the incentives you qualify for when you switch to solar energy.