2024 Solar Incentives Guide for West Chicago, IL - Tax Credits & Rebates

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

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

Solar incentives mitigate the cost of installing a solar panel system on your home. Financial incentives like these are designed to encourage more people to make the switch to renewable energy. Solar incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of Illinois and some by your specific utility company, county or municipality. Types of solar incentives might include:

• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your home.
• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a specific (generally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and the like are typically given 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.
• Rebates: Rebates, or cash back after a purchase, are usually applied before any solar tax credits are calculated. Rebates might be offered by your local utility company, by your county or by your state.
• 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.)
• Net Metering: You may be able to sign a net metering contract with your West Chicago utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your monthly utility bill.

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Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. One of the incentives many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of the cost of your solar system.

The ITC originally covered 30% of the total cost of installing solar panels, and has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC can be applied to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.

Your local West Chicago solar panel installer can provide you with more information about the ITC and how it might apply to your situation.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Now, solar installation projects that are completed between 2022 and 2032, can qualify for a 30% tax credit. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit will apply to you, reach out to your local West Chicago solar installers.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. As with federal incentives, these could include tax credits, rebates and more. Some incentives are ongoing, while others might only be available for a limited time. These incentives might be offered by your county or municipality, or by the Illinois government.

Next Steps for Installing Solar in West Chicago

Nationwide solar energy use has gone up tremendously in the last 15 years, in part due to the increase in availability of solar incentives. You can obtain these incentives from the Illinois government, the federal government or your local utility company. We suggest talking to your local West Chicago solar installation company for more information about these incentives and to be sure that you're getting the most money possible for your solar system.