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

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

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

Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. This category of financial incentives is intended to encourage more Americans to make the switch to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, while others are provided by the Illinois government or your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Net Metering: Net metering factors in after your solar system is up and running. If you have in place a net metering agreement with your Waterloo 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 is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
• Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a predetermined (generally small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically provided by your state government. SRECs can be sold to your utility company or another buyer, and this is usually considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
• Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when calculating property tax for your house.
• Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before any tax credits are calculated.

Federal Solar Incentives

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

The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost — for panels, accessories, labor and equipment — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

Talking to your local Waterloo solar panel installer is the best way to understand how the ITC may apply to you.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. The amount will decrease slightly on a yearly basis until the end of the current program. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit will apply to you, speak with your local Waterloo solar installation company.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. As with federal incentives, these can include rebates, tax credits and more. Certain incentives are ongoing, while others may only be available for a limited time. Incentives may be provided by your county or municipality, or by the Illinois government.

Next Steps for Installing Solar in Waterloo

Solar incentives can be offered by your local utility company, the federal government or the Illinois government. The growing number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Speak with your local solar panel installer today to learn more and to save as much money as possible on solar panels for your Waterloo home.