2023 Solar Incentives Guide for Salem, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Salem.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Salem?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to encourage people to switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are provided by the state of Illinois or your utility company, county or municipality. Types of solar incentives might include:
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if you have a solar system that produces more than a specified (usually small) amount of electricity. These types of incentives are typically handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
- Net Metering: Net metering factors in after your solar panels are up and running. If you have in place a net metering agreement with your Salem utility company, the company 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.
- Tax Exemptions: Your solar panels could qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the value added by your solar panels when you are calculating property taxes on your house.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Rebates: Solar rebates may be provided by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a predetermined percentage of your solar system's cost.
The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can receive this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.
Your local Salem solar panel installer can provide you with more information about the ITC and how it might apply to your situation.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. Homeowners can now qualify for a credit of 30% of the total costs of solar system installation for projects that began after January 1, 2022 and will be finished by the end of 2032. The credit percentage will then begin to decrease annually until the Clean Energy Credit expires 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. The easiest way to understand how the new Clean Energy Credit applies to you is to get in touch with your local Salem solar panel installation expert.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more are often offered at the state and local level. Some incentives are ongoing, while others are offered for only a limited time. Your local solar incentives could come from the Illinois government, or from your specific county or municipality.
Next Steps for Installing Solar in Salem
You can apply for and receive solar incentives from the federal government and the Illinois government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. We suggest talking to your local Salem solar installation company for more information about these incentives and to ensure that you're getting the most money possible for your solar system.
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries
Best Warranty Coverage
Sunpro Solar
- Industry-leading warranty coverage
- Expansive service area
- Some reported communication issues
- No leases or PPAs
EcoWatch's Salem, IL Solar Incentives FAQs
Can I claim incentives for adding solar panels to a vacation home, rental property or commercial property?
While we recommend getting in touch with your local solar installer and/or tax professional to better understand what solar incentives apply to you, many apply to a second home, provided that it is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the details.
Who installs solar panel systems near me?
To find the best solar panel installers near you, take a look at our article on the top solar companies in Salem.
What are some environmental benefits of adding solar panels to my home?
You can lower your carbon footprint by 500 pounds of CO2 annually when you install solar panels. This adds up to around 13,000 pounds in 20 years. Solar is also a renewable energy source, which means that making the switch reduces the drain on our planet's resources.
If I switch my appliances out for ones that can utilize solar energy, are there any incentives I can claim?
The recently passed Inflation Reduction Act includes provisions for several incentives designed to reward homeowners for making eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on precisely which incentives you are eligible for, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to confirm that you are claiming the correct incentives and getting the most money you can.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.