2023 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/

Solar incentives are meant to encourage homeowners to switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. You may qualify for different types of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Illinois and others from the federal government. You might qualify for any of the following types of solar incentives:

• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from your total price before any tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if you have a solar system that produces over a specified (generally small) amount of electricity. Performance-based incentives are generally handled at the state level. You can sell SRECs to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
• Tax Exemptions: These might come in the form of property tax exemptions, which let you ignore the value of your solar system when paying property tax on your house. They may also include exemptions on sales tax at the time of purchase.
• Net Metering: Don't forget to speak with your Villa Park utility company about signing a net metering contract. This allows you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.

Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of when you think about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of the cost of your solar system.

The ITC can be applied to solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can apply towards solar panels installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

To best understand how the ITC could apply to your situation, speak to your local Villa Park solar panel installer and request more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will be decreased slightly each year until the current program ends. 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. Your local Villa Park solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more might be available at a more local level. Some incentives are ongoing, while others may only be available for a limited time. Solar incentives might be given by your county or municipality, or by the Illinois government.

Next Steps for Installing Solar in Villa Park

Solar incentives may be provided by your local utility company, the federal government or the Illinois government. The growing number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. If you're prepared to make the change to solar energy, reaching out to your local Villa Park solar panel installation expert is an excellent place to start.