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What Solar Tax Credits, Incentives, and Rebates are Available in Taylorville?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. You might be eligible for several types of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Illinois and others from the federal government. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions let you ignore the value added by your solar system when you're calculating how much property tax you need to pay on your house.
- Rebates: A rebate is a partial refund given after you've purchased your solar panels. These 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.
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement in place with your Taylorville utility company, they 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 be refunded a percentage of the value.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the government. Tax credits differ from tax deductions.
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are generally handled by your state government. Once your solar system meets a certain threshold (typically a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. One of the incentives that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of the cost of your solar system.
The ITC was originally for 30% of the cost of solar panel installation, and has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The 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 applies 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 Taylorville solar panel installation expert can provide more information about the ITC and how it 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 Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. This amount will be decreased slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. Your local Taylorville solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more might also be offered at the local or state level. These incentives — which may be provided by the state of Illinois, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Taylorville
You can receive solar incentives from the Illinois government and the federal government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Contact your local solar panel installer today to find out more information and to save as much money as possible on solar panels for your Taylorville home.
EcoWatch's Taylorville, IL Solar Incentives FAQs
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