2025 Solar Incentives Guide for Springfield, IL - Tax Credits & Rebates

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

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

The phrase "solar incentives" covers 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. The incentives could include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of Illinois and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled at the state level. Once your solar system meets the threshold (normally 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 is generally considered part of your taxable income.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. These could be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
• Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when you are calculating property taxes on your home.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Net Metering: Be sure to talk with your Springfield utility company about signing a net metering agreement. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. 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 your solar system's cost.

The ITC initially applied to 30% of the total cost of installing a solar system, although it has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum claim amount. 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.

Your local Springfield solar panel installer can offer more information about the ITC and how it applies to your situation.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now receive a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. This percentage will then decrease on a yearly basis until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. Your local Springfield solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. As with federal incentives, these may include tax credits, rebates and more. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives may come from your county or municipality, or from the Illinois government.

Next Steps for Installing Solar in Springfield

You can apply for solar incentives from the Illinois government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. Your local Springfield solar panel installer can help you learn more about which incentives you can apply for, and get you started on the path to switching to renewable energy today.