2023 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 designed to mitigate the cost of installing solar panels on your home. This category of financial incentives is designed to encourage more people to convert their home partially or fully to renewable energy. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are provided by the state of Illinois or by your specific utility company, county or municipality. Types of solar incentives might include:

• Rebates: Solar rebates can be offered by your local utility company, or by your county or state. These rebates work as partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
• Net Metering: You can sign a net metering contract with your Peoria 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.
• Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions allow you to exclude the value that your solar panels add when you're calculating the amount of property tax you need to pay on your house.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are usually handled at the state level. Once your solar system meets a certain threshold (normally a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. One of the incentives that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of your solar system's cost.

The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC originally paid out 30% of all installation costs (panels, equipment, accessories and labor), although the amount has fluctuated over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.

Talking to your local Peoria solar panel installer is the best way to learn more about how the ITC applies to you.

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. The amount will then decrease slightly each year until the current program ends. The expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

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, talk to your local Peoria solar installers.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more may be available at a more local level. Some incentives are ongoing, while others are only available for a limited time. Solar incentives may be given by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Peoria

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 over the last 15 years has helped greatly increase nationwide adoption of solar energy. Getting in touch with your local Peoria solar panel installer is the best first step towards getting all the incentives you qualify for when you switch to solar energy.