2024 Solar Incentives Guide for Urbana, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Urbana.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 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 Urbana?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Solar incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of Illinois and some by your utility company, county or municipality. Types of solar incentives might include:
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Rebates: A rebate is a partial refund given after you've purchased your solar panels. Rebates may be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
- Tax Exemptions: These might come in the form of property tax exemptions, which allow you to ignore the value added by your solar panels when paying property tax on your home. They may also include exemptions on sales tax at the time of purchase.
- Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Urbana utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
- Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce over a threshold (usually small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically given by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Federal Solar Incentives
Federal solar incentives are probably the first thing that you think of when thinking about solar incentives. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of the cost of your solar system.
The ITC was originally for 30% of the cost of installing solar panels, although it has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC can be applied to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.
Your local Urbana solar panel installer can give you more information about the ITC and how it might apply to your situation.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners may be eligible for a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit ends in 2035. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit applies to you, get in touch with your local Urbana solar installation expert.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more may be offered at the local or state level. These incentives might be given out by the Illinois government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Urbana
Solar incentives might be offered by the federal government, the Illinois government or your local utility company. The growing number of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Speak with your local solar panel installation expert today to discover more about the various programs and to save the most money possible on solar panels for your Urbana home.
EcoWatch's Urbana, IL Solar Incentives FAQs
My home already has solar panels. Does my system qualify for any incentives?
An excellent idea would be to talk to the company that installed your system – or speak to a local Urbana solar installer — to learn about which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are the environmental benefits of switching to solar?
You can reduce your carbon footprint by 500 pounds of CO2 annually by installing solar panels. This adds up to roughly 13,000 pounds over 20 years. In addition, solar power is a renewable energy source, which means that making the switch lessens the drain on our planet's resources.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now called the Clean Energy Credit, is set to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
What if I want to add solar panels to a rental property, vacation home or commercial property? Do I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own; most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend talking to your local solar installer and/or tax professional to fully understand what incentives will apply to your specific situation.
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.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.