2023 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 phrase "solar incentives" refers to financial incentives designed to encourage increased use of renewable energy by making installing and using solar panels more affordable. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are handled by the Illinois government or by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Exemptions: These may come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when paying taxes on your house. You could also look for exemptions on sales tax at the time of purchase.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if you have a solar system that produces more than a specified (usually small) amount of electricity. Performance-based incentives are normally handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the government. Tax credits are different from tax deductions.
• Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Sterling utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other areas you might get refunded a percentage of the value.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from your total price before tax credits are calculated.

Federal Solar Incentives

When you think about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of your solar system's cost.

The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost — for panels, labor, accessories and equipment — although the percentage may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

To better understand how the ITC might apply to your situation, speak to your local Sterling solar panel installer and ask for more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can apply for a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Sterling solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

There are more than just federal solar incentives; rebates, tax credits and more might also be offered at the local or state level. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives might come from your county or municipality, or from the Illinois government.

Next Steps for Installing Solar in Sterling

There are a variety of solar incentives: those offered by the federal government, those offered by the Illinois government and those offered by local utility companies, to name a few. The use of solar energy has increased enormously in the last 15 years, thanks to these incentives. When you're ready to make the change to solar energy, calling your local Sterling solar panel installation expert is a great first step.