2023 Solar Incentives Guide for Vernon, IL - Tax Credits & Rebates

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. Various kinds of incentives, like discounts, cash back or monthly utility bill credits, might be available to you. Certain incentives may be handled by the Illinois government, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:

• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from your total price before tax credits are calculated.
• Tax Exemptions: Your solar system could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when you are calculating property taxes on your home.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that normally counts as part of your taxable income. In most cases, 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 normally handled by your state government.
• Net Metering: Net metering factors in once your solar panels are up and running. If you have in place a net metering agreement with your Vernon utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
• Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the government. Tax credits are different from tax deductions.

Federal Solar Incentives

When people think of solar incentives, federal incentives might be the first thing that comes to mind. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of the cost of your solar system.

The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.

Contacting your local Vernon solar panel installation expert is the best way to understand how the ITC could apply 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). Homeowners can now receive a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022 and will be finished by the end of 2032. The credit percentage will then begin to decrease yearly until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit might apply to you, get in touch with your local Vernon solar installation expert.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more can be offered at a more local level. Certain incentives are ongoing, while others may only be available for a limited time. Incentives might be provided by your county or municipality, or by the Illinois government.

Next Steps for Installing Solar in Vernon

You can apply for and 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 over the last 15 years has helped increase nationwide solar energy use enormously. Talking to your local Vernon solar panel installer is a great first step towards getting the most money possible when you switch to solar energy.