2024 Solar Incentives Guide for Sterling, IL - Tax Credits & Rebates

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

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

The term "solar incentives" refers broadly to financial incentives that are in place to encourage the adoption and use renewable energy by making solar panels more affordable. You might qualify for different types of incentives, including 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. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that normally counts as part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are normally handled by your state government.
• Net Metering: Make sure you talk with your Sterling utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when paying property tax on your home.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Rebates: Solar rebates may be offered by your state or county, or by your local utility company. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.

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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 gives you a credit on your taxes equal to a specified percentage of your solar system's cost.

The ITC initially applied to 30% of the cost of installing a solar system, although that number has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC can be applied to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.

Your local Sterling 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 ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. For solar systems installed between January 1, 2022, and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, talk to your local Sterling solar installers.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more might be available at a more local level. Incentives might be given by your county or municipality, or by the state of Illinois. Some incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Sterling

You can qualify for solar incentives from the Illinois government and the federal government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. When you're ready to switch over to solar energy, reaching out to your local Sterling solar panel installation expert is a great first step.