2024 Solar Incentives Guide for Rich, IL - Tax Credits & Rebates

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

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

Solar incentives are intended to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Different types of incentives, including cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be offered by the Illinois government, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

• Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when calculating property tax for your house.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are normally handled by your state government. Once your solar panel system meets the threshold (generally a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from your total price before tax credits are calculated.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Rich utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in others you may be refunded a percentage of the value.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.

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Federal Solar Incentives

Federal solar incentives are likely the first thing that comes to mind when thinking about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of your solar system's cost.

The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed after January 1, 2006, on a property you own for you to be eligible for the credit. Originally, the ITC covered 30% of all installation costs (panels, equipment, accessories and labor), although this amount has fluctuated over the 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.

Reaching out to your local Rich solar panel installation expert is the best way to learn more about how the ITC may apply to your situation.

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. Now, solar installation projects that are completed between 2022 and 2032, might qualify for a 30% tax credit. This percentage will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. Your local Rich solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Rich

Solar incentives can come from the Illinois government, the federal government or your local utility company. The growing number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. When you're prepared to make the change to solar energy, getting in touch with your local Rich solar panel installation expert is a great first step.