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

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

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

Solar incentives are intended to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Solar incentives may include upfront discounts, cash back or monthly credits towards your 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:

• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
• Tax Exemptions: Tax exemptions may come in 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 added value of your solar system when calculating property tax for your house.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or similar performance-based incentives. SRECs and similar incentives are generally handled by your state government.
• Rebates: Solar companies may 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. The value of a rebate will usually be deducted from your total price before tax credits are calculated.
• Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement with your Paris utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other places you might be refunded a percentage of the value.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have heard of. One of the incentives that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specific percentage of the cost of your solar system.

The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. Initially, the ITC applied to 30% of all system costs (panels, labor, accessories and equipment), although the covered amount has fluctuated over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Your local Paris solar panel installation expert can provide more information about the ITC and how it applies to your situation.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit; this amount will decrease slightly on a yearly basis until the end of the current program. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Paris solar panel company can answer your questions and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. As with federal incentives, these can include tax credits, rebates and more. Incentives might be handled by your county or municipality, or by the state of Illinois. Certain incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Paris

The nationwide use of solar energy has significantly increased in the last 15 years, in part thanks to the growth in the number of solar incentives. You might receive these incentives from the federal government, the Illinois government or your local utility company. It is a good idea to talk to your local Paris solar installation expert for more information about these incentives and to be sure that you're getting the largest number possible for your solar system.