2023 Solar Incentives Guide for Summit, IL - Tax Credits & Rebates

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

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

The term "solar incentives" refers to financial incentives that are in place to encourage the adoption and use renewable energy by making solar panels more affordable. Different types of incentives, including cash back, discounts or monthly utility bill credits, may be available to you. Some incentives may be handled by the Illinois government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:

• Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. These might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if the solar system on your home produces more than a specified (usually small) amount of electricity. This category of incentives is generally handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions let you ignore the value that your solar panels add when you calculate how much property tax you need to pay on your house.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you've signed a net metering agreement with your Summit utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other areas you might get refunded a percentage of the value.

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. A federal incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of the cost of your solar system.

The ITC can be applied to solar systems 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, equipment and accessories — although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.

Speaking with your local Summit solar panel installer is the best way to understand how the ITC applies to your situation.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit extends until 2035. You are now eligible for a 30% credit for solar systems installed between 2022 and 2032. The total credit will then be decreased by a few percentage points every year until the date of expiration. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.

More information about the new Inflation Reduction Act can be found here. The easiest way to learn more about how the new Clean Energy Credit might apply to you is to get in touch with your local Summit solar panel installers.

State & Local Solar Incentives

Tax credits, rebates and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones as well. Incentives might be handled by your county or municipality, or by the state of Illinois. Certain incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Summit

You can qualify 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. Reach out to your local solar panel installer today to discover more about the various programs and to save as much money as possible on a solar system for your Summit home.