2024 Solar Incentives Guide for Park Ridge, IL - Tax Credits & Rebates

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

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

The term "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. The incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the Illinois government and some by your utility company, county or municipality. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. In most cases, a certain (small) threshold of energy production must be met before your solar system can earn SRECs or other performance-based incentives. SRECs and similar incentives are typically handled at the state level.
• Tax Exemptions: Your solar panels might qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when calculating property taxes on your home.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually come off the 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 in place with your Park Ridge utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
• Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the federal government. These differ from tax deductions.

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Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of the cost of your solar system.

The ITC is applied to the total cost of solar panel installation, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.

Contacting your local Park Ridge solar panel installer is the best way to understand how the ITC applies to you.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022, and completed by the end of 2032. At this point, the credit percentage will decrease slightly each year until the program expires in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit will apply to you, reach out to your local Park Ridge solar installation company.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. As with federal incentives, these could include rebates, tax credits and more. Certain incentives are ongoing, while others might only be available for a limited time. They may be given by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Park Ridge

Solar incentives may be provided by the Illinois government, the federal government or your local utility company. The large number of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Your local Park Ridge solar panel installer can help you learn more about which incentives you should apply for, and get you on track to switch to renewable energy today.