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

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

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

The phrase "solar incentives" includes a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various kinds of incentives, like discounts, cash back or monthly utility bill credits, may be available to you. Certain incentives may be handled by the Illinois government, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. Any rebates you receive will usually come off your total price before any tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce over a threshold (generally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically given by your state government. You can sell SRECs to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Plano utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other places you might be refunded a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Your solar system might qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your home.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC initially applied to 30% of the cost of solar system installation, although it has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum claim amount. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.

Curious how the ITC might apply to your specific situation? Reach out to your local Plano solar panel installer to get more information.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit ends in 2035. The expansion also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Plano solar panel installer can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Plano

The large number of available solar incentives has enormously increased the nationwide adoption of solar energy over the last 15 years. You might qualify for solar incentives from the federal government, the Illinois government or from your local utility company. Talking to your local Plano solar panel installation expert is a great first step towards getting all the incentives you qualify for when you switch to solar energy.