2023 Solar Incentives Guide for South Holland, IL - Tax Credits & Rebates

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

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

Solar incentives are meant to encourage people to switch to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. Various kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, might be available to you. Some incentives may be handled by the Illinois government, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:

• Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the federal government. These are different from tax deductions.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if your solar system produces more than a specified (usually small) amount of electricity. These types of incentives are normally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
• Rebates: Solar rebates might be provided by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
• Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your South Holland utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other areas you might get refunded a percentage of the value.
• 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 added value of the solar panels when calculating property taxes on your house.

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Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC offers a tax credit for a set 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 after January 1, 2006 on a property owned by you for you to claim the credit. The ITC initially covered 30% of all installation costs (panels, accessories, labor and equipment), although this amount has fluctuated over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Your local South Holland solar panel installation expert can provide you with more information about the ITC and how it may apply to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. Homeowners can now receive a credit equal to 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then decrease on a yearly basis until the Clean Energy Credit expires in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit applies to you, talk to your local South Holland solar installation company.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. Similar to federal incentives, these may include tax credits, rebates and more. Incentives may be offered by your county or municipality, or by the state of Illinois. Certain incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in South Holland

There are many kinds of solar incentives: those given by the federal government, those given by the Illinois government and those given by local utility companies, to name a few. The use of solar energy has increased tremendously in the last 15 years, thanks to these incentives. Your local South Holland solar panel installation expert can provide you with more details about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.