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

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

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

The term "solar incentives" refers to financial incentives that are in place to encourage increased use of renewable energy by making solar panels more affordable. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are provided by the state of Illinois or by your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
• Tax Exemptions: Your solar panel system might qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when calculating property taxes on your home.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have in place a net metering agreement with your Rockford utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other areas you might get refunded a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are usually handled at the state level. Once your solar system meets the qualification 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: Solar rebates may be provided by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after you pay for solar panels and before tax credits are calculated.

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Federal Solar Incentives

When people think of solar incentives, federal incentives might be the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a predetermined percentage of the money you spend installing solar panels.

The ITC covers solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.

Your local Rockford solar panel installer can give you more information about the ITC and how it may apply to your situation.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). For solar systems installed between January 1, 2022, and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Rockford solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. Similar to federal incentives, these could include rebates, tax credits and more. These incentives — which may be handled by your county or municipality, or by the state of Illinois — may be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Rockford

Solar incentives may come from your local utility company, the Illinois government or the federal government. The variety of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. We suggest talking to your local Rockford solar installation expert for more information about these incentives and to make sure that you're getting the largest number possible for your solar panels.