2023 Solar Incentives Guide for Peru, IL - Tax Credits & Rebates

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

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. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are handled by the state of Illinois or by your utility company, county or municipality. Types of solar incentives might include:

• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are usually handled at the state level. Once your solar system meets a predetermined threshold (usually 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 make is generally considered part of your taxable income.
• Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Peru utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other areas you might make back a percentage of the value.
• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar system. Property tax exemptions let you exclude the value added by your solar system when calculating how much property tax you need to pay.
• Rebates: Rebates, or cash back after a purchase, are typically given prior to any solar tax credits being calculated. These rebates can be given by your local utility company, by your county or by your state.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend on your solar system.

The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, equipment and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that 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 claim amount.

Wondering how the ITC applies to your specific situation? Contact your local Peru solar panel installation expert to get more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then begin to decrease on a yearly basis until the Clean Energy Credit ends in 2035. The program 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. Your local Peru solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these can include rebates, tax credits and more. Certain incentives are ongoing, while others may only be available for a limited time. They may be provided by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Peru

You can apply for and receive solar incentives from the Illinois government and the federal government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. We recommend talking to your local Peru solar installation company for more information about these incentives and to ensure that you're getting all of the money you can for your solar panels.