2023 Solar Incentives Guide for Swansea, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Swansea.
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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What Solar Tax Credits, Incentives, and Rebates are Available in Swansea?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to mitigate the cost of installing solar panels on your home. This category of financial incentives is in place to encourage more homeowners to make the switch to renewable energy. Solar incentives could include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the Illinois government and some by your utility company, county or municipality. Categories of solar incentives include:
- Tax Exemptions: Your solar system might qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when calculating property taxes on your home.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Swansea utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in others you might make back a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may 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 typically considered part of your taxable income.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Rebates: A solar rebate is a partial refund after the purchase of your solar system. Rebates may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before calculating tax credits.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a certain percentage of the money you spend on your solar system.
The ITC applies to solar panels 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, labor, accessories and equipment), although this amount has fluctuated over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To find out exactly how much the ITC could save you, contact your local Swansea solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it 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. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Swansea solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. As with federal incentives, these may include tax credits, rebates and more. Some incentives are ongoing, while others are offered for only a limited time. Your local solar incentives could come from the Illinois government, or from your specific county or municipality.
Next Steps for Installing Solar in Swansea
The large number of solar incentives available has contributed greatly to the increase in the adoption of solar energy nationwide over the past 15 years. You may receive solar incentives from your local utility company, the Illinois government or the federal government. If you're ready to make the switch to solar energy, talking to your local Swansea solar panel installation expert is a great first step.
EcoWatch's Swansea, IL Solar Incentives FAQs
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.