2025 Solar Incentives Guide for Pekin, IL - Tax Credits & Rebates

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

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

The phrase "solar incentives" refers broadly to financial incentives implemented by the government and by solar companies to encourage people to use renewable energy by making solar panels more affordable. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are handled by the state of Illinois or by your utility company, county or municipality. Some broad categories of solar incentives include:

• Rebates: Solar rebates may be offered by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after you pay for a solar system and before tax credits are calculated.
• Net Metering: Be sure to talk to your Pekin utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Typically, there is a small threshold of energy production to meet before your solar system can earn SRECs or other performance-based incentives. These kinds of incentives are typically handled by your state government.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, which is 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 paying property tax on your home.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specified percentage of your solar system's cost.

The ITC initially applied to 30% of the total cost of solar system installation, although it has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. 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 in the United States and owned by you.

To better understand how the ITC will apply to you, call your local Pekin solar panel installer and ask for more information.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit. The amount will decrease slightly on a yearly basis until the end of the current program. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.

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

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. Incentives might be provided by your county or municipality, or by the state of Illinois. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Pekin

Solar incentives can be offered by your local utility company, the Illinois government or the federal government. The large number of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Speak with your local solar panel installation expert today to find out more information and to save the most money possible on solar panels for your Pekin home.