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. These incentives may include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of Illinois and some by your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from your total price before any tax credits are calculated.
- Tax Exemptions: Your solar system may qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your house.
- Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Urbana utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. 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): SRECs and other performance-based incentives are normally handled by your state government. Once your solar system meets the qualification threshold (usually a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
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
When you think about solar incentives, you probably think of federal incentives first. A federal incentive many people are likely to be 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 applies to solar panels installed after January 1, 2006, on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost – for panels, labor, equipment and accessories – although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.
Curious how the ITC might apply to your specific situation? Get in touch with your local Urbana solar panel installer to get more information.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. 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 equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the 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. Your local Urbana solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Like with federal incentives, these could include rebates, tax credits and more. These incentives might be given out by your county or municipality, or by the Illinois government. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Urbana
The large number of solar incentives available has helped tremendously increase the use of solar power nationwide over the last 15 years. You can get solar incentives from your local utility company, the federal government or the Illinois government. Getting in touch with your local Urbana solar panel installation company is the right first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Urbana, IL Solar Incentives FAQs
How do I learn if I qualify for solar incentives?
It's a smart idea to get in touch with your local Urbana solar installer for a better understanding of which incentives your project will qualify for. Generally, solar incentives apply to new solar systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those offered by the government of Illinois, may have other requirements.
My home already has solar panels. Does my system qualify for any incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Speaking with the company that installed your system, or any local Urbana solar installer, can help you understand what incentives you might want to apply for.
What are the environmental benefits of switching to solar?
Solar energy is a renewable energy source — by changing where you get your energy, you help reduce the strain on our planet's resources. A solar system can also lower the CO2 emissions from your home by 500 pounds a year, or roughly 13,000 pounds in 20 years.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I get any financial incentives when I add solar panels to a rental property, vacation home or commercial property?
While we recommend getting in touch with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many apply to a second home, so long as that home is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the specifics.
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.