2023 Solar Incentives Guide for Shiloh Valley, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Shiloh Valley.
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 September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Shiloh Valley?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives help mitigate the cost of installing a solar panel system on your home. Financial incentives like these are intended to encourage more homeowners to convert their home partially or fully to renewable energy. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered 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:
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Shiloh Valley utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you might get refunded a percentage of the value.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.
- Tax Exemptions: Your solar system may qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when calculating property taxes on your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled at the state level. Once your solar panel system meets the qualification threshold (usually a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
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Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of the cost of your solar system.
The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC originally paid out 30% of all system installation costs (panels, equipment, labor and accessories), although this amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Your local Shiloh Valley solar panel installer can offer more information about the ITC and how it may apply to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit runs until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will be decreased slightly on a yearly basis until the end of the current program. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local Shiloh Valley solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Like with federal incentives, these could include tax credits, rebates and more. Certain incentives are ongoing, while others are offered for only a limited time. Your local solar incentives may come from your county or municipality, or from the Illinois government.
Next Steps for Installing Solar in Shiloh Valley
Solar energy use nationwide has increased enormously in the past 15 years, in part thanks to the increase in availability of solar incentives. You can obtain these incentives from the federal government, the Illinois government or your local utility company. We recommend talking to your local Shiloh Valley solar installation company to learn more about these incentives and to ensure that you're getting the largest number possible for your solar panels.
EcoWatch's Shiloh Valley, IL Solar Incentives FAQs
How can I find out if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Shiloh Valley solar installer to get an understanding of which incentives your project will qualify for. In most cases, solar incentives apply to new solar systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, such as those offered by the government of Illinois, might have additional requirements.
What are the highest-rated solar panel installation companies near me?
To discover the top solar panel installers near you, take a look at our article on Shiloh Valley's top solar panel companies.
What are the environmental benefits of switching to solar energy?
You can reduce your carbon footprint by 500 pounds of CO2 annually when you switch to solar panels. This adds up to approximately 13,000 pounds over 20 years. In addition, solar power is a renewable energy source, meaning that making the switch lessens the drain on our planet's resources.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is slated to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I receive 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 your solar panels. Depending on which incentives you are claiming, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to confirm that you are claiming the correct incentives and that you're getting the most money possible.
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.