2024 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 encourage homeowners to switch their home over to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are provided by the federal government, while others are handled by the state of Illinois or by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Net Metering: Net metering becomes relevant after your solar system is 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 produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you may be refunded a percentage of the value.
• Tax Exemptions: Your solar system could 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.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled at the state level. Once your solar panel system meets a certain 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 receive is generally considered part of your taxable income.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the government. These differ from tax deductions.
• Rebates: Rebates, or cash back after a purchase, are typically applied prior to any solar tax credits being calculated. These rebates may be given by your local utility company, by your state or by your county.

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Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a specified percentage of the money you spend installing solar panels.

The ITC applies to the total cost of installing a solar system, including the panels themselves as well as labor, equipment and accessories. 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.

Talking to your local Peru solar panel installer is the best way to understand how the ITC could apply to you.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. After 2032, the credit percentage will decrease slightly each year until the program expires in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.

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

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more may be available at a more local level. Certain incentives are ongoing, while others are offered for only a limited time. These local incentives may come from your county or municipality, or from the Illinois government.

Next Steps for Installing Solar in Peru

The expanding number of solar incentives available has enormously increased the use of solar power nationwide over the last 15 years. You can get solar incentives from the federal government, the Illinois government or from your local utility company. Reaching out to your local Peru solar panel installation expert is a great first step towards getting the most money possible when you switch to solar energy.