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/

The phrase "solar incentives" refers to a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are offered by the Illinois government or your utility company, county or municipality. Types of solar incentives might include:

• Tax Exemptions: These could come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when paying property tax on your house. You could also look for exemptions on sales tax at the time of purchase.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a predetermined (generally small) amount of electricity will qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically given by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
• Rebates: Solar rebates can be provided by your local utility company, or by your county or state. These rebates work as cash back that is applied after you purchase a solar system and before tax credits are calculated.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement in place with your West Chicago utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.

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Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of your solar system's cost.

The ITC applies towards solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can claim this credit for solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.

Curious how the ITC might apply to your specific situation? Reach out to your local West Chicago solar panel installation expert 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). The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar systems installed between 2022 and 2032. After this, the credit percentage will see a slight decrease annually until the program expires in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local West Chicago solar panel installer can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the local or state level. These incentives may be provided by your county or municipality, or by the Illinois government. Some are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in West Chicago

Nationwide solar energy use has gone up significantly in the past 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from the Illinois government, the federal government or your local utility company. Your local West Chicago solar panel installation company can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.