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

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

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 people to switch their home over to renewable energy. The incentives may include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the state of Illinois and some by your specific utility company, county or municipality. Categories of solar incentives include:

• Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Watson utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you may be refunded a percentage of the value.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates might be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are generally handled by your state government. Once your solar system meets a predetermined threshold (generally a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you make is generally considered part of your taxable income.
• Tax Exemptions: These could come in the form of property tax exemptions, which can let you exclude the value of your solar system when paying taxes on your house. You could also look for exemptions on sales tax at the time of purchase.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have heard of. One of the incentives 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 the cost of your solar system.

The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as labor, equipment and accessories. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.

Your local Watson solar panel installation expert can offer more information about the ITC and how it might apply to your situation.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now receive a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. The credit percentage will then begin to decrease on a yearly basis until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit will apply to you is to speak with your local Watson solar panel installers directly.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these could include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. These local incentives may come from the Illinois government, or from your specific county or municipality.

Next Steps for Installing Solar in Watson

Nationwide solar energy use has gone up tremendously in the past 15 years, in part due to the proliferation of solar incentives. You may get these incentives from the federal government, the Illinois government or your local utility company. Speaking with your local Watson solar panel installation expert is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.