2023 Solar Incentives Guide for Pekin, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Pekin.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Pekin?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
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. Different types of incentives, including cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be handled by the Illinois government, 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:
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Rebates: Solar rebates can be provided by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after you purchase a solar system and before tax credits are calculated.
- Tax Exemptions: These might come in the form of property tax exemptions, which let you exclude the value added by your solar panels when paying property tax on your house. You could also look for exemptions on sales tax at the time of purchase.
- Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce over a specific (usually small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically provided at the state level. You can sell SRECs to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
- Net Metering: You can sign a net metering contract with your Pekin utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of your solar system's cost.
The ITC initially applied to 30% of the cost of installing solar panels, and has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC can be applied to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
Your local Pekin solar panel installation expert can provide you with more information about the ITC and how it may apply to your situation.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. The Clean Energy Credit has increased the current credit 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. Starting in 2023, the program 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 better understand how the new Clean Energy Credit might apply to you, reach out to your local Pekin solar installers.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more might also be offered at the state and local level. These incentives may be provided by your county or municipality, or by the Illinois government. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Pekin
You can receive solar incentives from the Illinois government and the federal government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Your local Pekin solar panel installation company can provide you with more details about which incentives you can apply for, and get you started on the path to switching to renewable energy today.
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries
Best Warranty Coverage
Sunpro Solar
- Industry-leading warranty coverage
- Expansive service area
- Some reported communication issues
- No leases or PPAs
EcoWatch's Pekin, IL Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
While we recommend getting in touch with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many will apply to a second home, provided that it is in the United States and owned by you. There may be other incentives available specifically for commercial properties, depending on the details.
If I installed solar panels on my house a few years ago, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the exact installation date. Speaking with the company that installed your solar system, or any local Pekin solar installer, can help you understand what incentives you can apply for.
What are the environmental benefits of switching to solar?
You can decrease your carbon footprint by 500 pounds of CO2 annually when you install solar panels. This adds up to around 13,000 pounds over 20 years. In addition, solar power is a renewable energy source, meaning that making the switch reduces the drain on our planet's resources.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or the ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
The order your incentives will be applied in could vary depending on which incentives you are claiming but generally yes, you can receive multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to be sure you are claiming all of the incentives you qualify for and applying them in the correct order.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.