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

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

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

The phrase "solar incentives" covers a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, while others are provided by the state of Illinois or by your utility company, county or municipality. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or similar performance-based incentives. SRECs and similar incentives are generally handled by your state government.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually come off the total price before any tax credits are calculated.
• Tax Exemptions: Your solar panels may qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your house.
• Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your Troy 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 make back a percentage of the value.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the government. These are different from tax deductions.

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Federal Solar Incentives

Federal solar incentives are probably the first thing that you think of when you think about solar incentives. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a specified percentage of the money you spend on your solar system.

The ITC initially applied to 30% of the cost of installing a solar system, although it has fluctuated slightly over the years 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 accessories, equipment 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 Troy solar panel installation expert can provide you with more information about the ITC and how it applies to your situation.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit re-raises the credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. After 2032, the credit percentage will be reduced slightly each year until the program expires in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. Your local Troy 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

Tax credits, rebates and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones as well. Some incentives are ongoing, while others may only be available for a limited time. Solar incentives might be given by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Troy

The nationwide use of solar energy has gone up tremendously in the last 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from the Illinois government, the federal government or your local utility company. Talking to your local Troy solar panel installer is the best first step towards getting the most money possible when you switch to solar energy.