2025 Solar Incentives Guide for Washington, IL - Tax Credits & Rebates

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

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

The phrase "solar incentives" covers a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You might be eligible for various types of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Illinois government and others from the federal government. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are normally handled at the state level. Once your solar system meets a certain threshold (normally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive from the sale is usually considered part of your taxable income.
• Rebates: Solar rebates might be offered by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after your purchase of solar panels and before tax credits are calculated.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Net Metering: Don't forget to talk to your Washington utility company about signing a net metering contract. This will allow you to receive credit towards your utility bill every month for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when calculating property taxes on your house.

Federal Solar Incentives

When people think of solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC provides a tax credit for a set percentage of your solar system's cost.

The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006, for you to be eligible for the credit. Originally, the ITC covered 30% of all installation costs (panels, equipment, labor and accessories), although the covered amount has fluctuated slightly over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Have questions about how the ITC applies to your specific situation? Get in touch with your local Washington solar panel installer to get more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). For solar systems installed between January 1, 2022, and December 31, 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 ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. Your local Washington solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more may be available at a more local level. These incentives may be offered by your county or municipality, or by the Illinois government. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Washington

There are a variety of solar incentives: those given by local utility companies, those given by the Illinois government and those given by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, thanks to these incentives. We suggest talking to your local Washington solar installation expert to learn more about these incentives and to make sure that you're getting the most money possible for your solar panels.