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

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

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

Solar incentives are intended to encourage homeowners to switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are provided by the Illinois government or your utility company, county or municipality. Types of solar incentives might include:

• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Washington Park utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you may make back a percentage of the value.
• Rebates: Solar rebates might be offered by your local utility company, or by your county or state. These rebates work as partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
• Tax Exemptions: These might come in the form of property tax exemptions, which let you exclude the value added by your solar panels when paying taxes on your house. They may also include 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 federal government. (A tax credit is different from a tax deduction.)
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives might be available to you if you have a solar system that produces over a specified (usually small) amount of electricity. This category of incentives is generally handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you make is normally considered part of your taxable income.

Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides a tax credit for a set percentage of your solar system's cost.

The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed after January 1, 2006 on a property you own for you to claim the credit. The ITC originally paid out 30% of all system costs (panels, equipment, labor and accessories), although this amount has fluctuated over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

Your local Washington Park solar panel installer can provide more information about the ITC and how it might apply 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). Homeowners can now qualify for a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then begin to decrease yearly until the Clean Energy Credit expires in 2035. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Washington Park solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Rebates, tax credits and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. These incentives might be handled by the Illinois government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Washington Park

The variety of available solar incentives has enormously increased the use of solar power nationwide over the past 15 years. You might qualify for solar incentives from the federal government, the Illinois government or from your local utility company. It is a good idea to talk to your local Washington Park solar installation company to learn more about these incentives and to make sure that you're getting the most money possible for your solar panels.