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
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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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 term "solar incentives" includes a 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. Different kinds of incentives, like cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be offered by the state of Illinois, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if your solar system produces more than a specified (typically small) amount of electricity. Performance-based incentives are typically handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you make is usually considered part of your taxable income.
- Net Metering: You can sign a net metering contract with your Springfield utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your monthly utility bill.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions let you exclude the added value of your solar system when calculating the amount of property tax you need to pay.
- Rebates: Solar rebates may be provided by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
Federal Solar Incentives
When thinking about solar incentives, federal incentives may be the first thing that comes to mind. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specific percentage of your solar system's cost.
The ITC applies to a solar system 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 last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.
Reaching out to your local Springfield solar panel installation expert is the best way to understand how the ITC applies to you.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can apply for a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit will apply to you is to speak with your local Springfield solar panel installers directly.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Like with federal incentives, these could include rebates, tax credits and more. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives might come from your county or municipality, or from the Illinois government.
Next Steps for Installing Solar in Springfield
The nationwide use of solar energy has gone up significantly in the past 15 years, in part due to the increase in availability of solar incentives. You may get these incentives from the federal government, the Illinois government or your local utility company. When you're prepared to make the switch to solar energy, getting in touch with your local Springfield solar panel installation expert is an excellent place to start.
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries
Best Warranty Coverage
- Industry-leading warranty coverage
- Expansive service area
- Some reported communication issues
- No leases or PPAs
EcoWatch's Springfield, IL Solar Incentives FAQs
What if I add a solar system to a rental property, vacation home or commercial property? Do I still qualify for incentives?
While we recommend speaking with your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives will apply to a second home, provided that it is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the details.
If I already have a solar system installed on my house, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the exact installation date. Speaking with a representative from the company that installed your system, or any local Springfield solar installer, can help you understand what incentives you can apply for.
How much will a solar system save me on my electric bill in Springfield annually?
After adding solar panels to your Springfield home, you can anticipate savings of approximately $850.03 per year, or approximately $16,150.59 over the next 20 years.
I want to switch my appliances out for ones that are more energy-efficient. Are there any benefits I can apply for?
The recently passed Inflation Reduction Act includes provisions for multiple incentives designed to reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
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.