2023 Solar Incentives Guide for Vandalia, IL - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Vandalia.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Vandalia?
Special Assessment for Solar Energy Systems
Solar Renewable Energy Credits
Federal Residential Renewable Energy Tax Credit
Solar incentives encourage people to make the switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Solar incentives could include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the Illinois government and some by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Exemptions: These could come in the form of property tax exemptions, which would allow you to exclude the value added by your solar panels when paying property tax on your house. You could also look for exemptions on sales tax at the time of purchase.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are usually handled by your state government. Once your solar system meets a predetermined threshold (typically a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your Vandalia utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
- Rebates: Rebates, or partial refunds after a purchase, are typically given before any solar tax credits are calculated. Solar rebates can be offered by your local utility company, by your county or by your state.
Federal Solar Incentives
Federal solar incentives are probably the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides a tax credit for a specific percentage of the cost of your solar system.
The ITC can be applied 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, equipment, accessories and labor — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.
Your local Vandalia solar panel installer can give you more information about the ITC and how it applies to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). With the new provisions, solar installation projects started after January 1, 2022 and completed by the end of 2032 may be eligible for a 30% tax credit. The amount of the credit will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit applies to you is to reach out to your local Vandalia solar panel installers with your questions.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more might also be offered at the local or state level. Incentives might be handled by the state of Illinois, or by your county or municipality. Certain incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Vandalia
There are many types of solar incentives: those provided by local utility companies, those provided by the federal government and those provided by the Illinois government, to name a few. The use of solar energy has grown enormously in the last 15 years, partially thanks to these incentives. It is a good idea to talk to your local Vandalia solar installation expert for more information about these incentives and to ensure that you're getting all of the money you can for your solar panels.
EcoWatch's Vandalia, 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.