2023 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" includes a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are offered by the state of Illinois or by your utility company, county or municipality. Some solar incentives you might qualify for are:

• Net Metering: Don't forget to talk to your Rockford utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
• 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 added value of the solar panels when calculating property taxes on your home.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates may be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a predetermined (normally small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and the like are typically offered 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.

Federal Solar Incentives

When you think about solar incentives, you probably 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 certain percentage of the money you spend on your solar system.

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

To better understand exactly how much the ITC could save you, get in touch with your local Rockford solar panel installation expert.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. The amount will then decrease slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. Your local Rockford solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Rebates, tax credits and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. These incentives may be offered by the Illinois government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Rockford

Solar incentives can be offered by the federal government, the Illinois government or your local utility company. The variety of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Reaching out to your local Rockford solar panel installation company is a great first step towards getting all the incentives you qualify for when you switch to solar energy.