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

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

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

Solar incentives are intended to encourage people to switch their home over to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. The incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the Illinois government and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if your solar system produces over a specified (generally small) amount of electricity. These types of incentives are generally handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you make is usually considered part of your taxable income.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
• Net Metering: You may be able to sign a net metering contract with your Peoria utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your utility bill each month.
• Tax Exemptions: Your solar panel system might qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when calculating property taxes on your house.
• Rebates: Rebates, or cash back after a purchase, are normally applied prior to any solar tax credits being calculated. These rebates might be provided by your local utility company, by your state or by your county.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have heard of. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of the cost of your solar system.

The ITC applies to the total cost of solar panel installation, including the panels themselves as well as accessories, labor and equipment. 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. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

Your local Peoria solar panel installation expert can offer more information about the ITC and how it might apply to your situation.

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. For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can receive a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. Your local Peoria solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it 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. Some incentives are ongoing, while others are available for a limited time. These incentives might be offered by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Peoria

Solar incentives can come from your local utility company, the federal government or the Illinois government. The large number of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Call your local solar panel installation company today to discover more about the various programs and to save as much money as possible on a solar system for your Peoria home.