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

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

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

The term "solar incentives" refers to financial incentives that are in place to encourage the adoption and use renewable energy by making solar panels more affordable. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are handled by the state of Illinois or your utility company, county or municipality. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are normally handled at the state level. Once your solar panel system meets the threshold (usually 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 usually considered part of your taxable income.
• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. 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.
• Net Metering: Be sure to talk with your Villa Park utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your house.

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Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specified percentage of your solar system's cost.

The ITC applies to the total cost of installing solar panels, 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 located in the United States that you own. 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.

Talking to your local Villa Park solar panel installation expert is the best way to understand how the ITC may apply to you.

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. The new Clean Energy Credit now runs until 2035. American homeowners can now receive a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. The total credit will then see a slight annual decrease until the date of expiration. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit might apply to you is to reach out to your local Villa Park solar panel company with your questions.

State & Local Solar Incentives

Tax credits, rebates and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones as well. The incentives — which may be provided by your county or municipality, or by the state of Illinois — may be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Villa Park

There are a variety of solar incentives: those provided by local utility companies, those provided by the federal government and those given by the Illinois government, to name a few. Solar energy use has grown tremendously in the last 15 years, partially due to these incentives. It is a good idea to talk to your local Villa Park solar installer to learn more about these incentives and to be sure that you're getting all the money you can for your solar system.