2023 Solar Incentives Guide for Springfield, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Springfield.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Springfield?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
City Water Light and Power - Residential Energy Efficiency Rebate Programs
Geothermal Heat Pump: $500/ton
Rain Barrel: $25
High Efficiency Toilet: $50
Water Heater: $200 - $400
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making installing and using solar panels more affordable. You may be eligible for various kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Illinois and others from the federal government. Categories of solar incentives include:
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the federal government. These differ from tax deductions.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (usually small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically offered by your state government. You can sell SRECs to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
- Tax Exemptions: Your solar panel system may qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when calculating property taxes on your house.
- Rebates: Rebates, or partial refunds after a purchase, are usually applied before any solar tax credits are calculated. Solar rebates might be offered by your local utility company, by your county or by your state.
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement in place with your Springfield utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in others you might receive a refund equivalent to a percentage of the value.
Federal Solar Incentives
When people think of solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of your solar system's cost.
The ITC was originally for 30% of the total cost of solar panel installation, and has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To better understand how the ITC might apply to you, get in touch with your local Springfield solar panel installer and request more information.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. Homeowners are now eligible for a credit of 30% of the total solar system installation costs 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 yearly until the Clean Energy Credit expires in 2035. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. Your local Springfield solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more might also be offered at the state and local level. These incentives may be provided by your county or municipality, or by the Illinois government. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Springfield
Solar incentives might be offered by your local utlity company, the Illinois government or the federal government. The growing number of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Contact your local solar panel installation expert today to discover more about the various programs and to save as much money as possible on solar panels for your Springfield home.
EcoWatch's Springfield, IL Solar Incentives FAQs
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.