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

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

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

Solar incentives are designed to mitigate the cost of installing solar panels on your home. These financial incentives are in place to encourage more homeowners to switch their home over to renewable energy. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are provided by the Illinois government or your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a specified (normally small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and the like are typically provided at the state level. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
• Tax Exemptions: These might come in the form of property tax exemptions, which allow you to ignore the value added by your solar panels when paying taxes on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you've signed a net metering agreement with your West Dundee utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates may be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.

The ITC is applied to the total cost of solar panel installation, including the panels themselves as well as equipment, accessories and labor. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

Your local West Dundee solar panel installer can provide more information about the ITC and how it applies to your situation.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Now, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible 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 qualify for credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. Your local West Dundee solar panel company can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Not all solar incentives are federal; rebates, tax credits and more might also be offered at the state and local level. The incentives — which may be handled by the state of Illinois, or by your county or municipality — could be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in West Dundee

The expanding number of available solar incentives has contributed greatly to the increase in the use of solar power nationwide over the past 15 years. You may receive solar incentives from the federal government, the Illinois government or from your local utility company. Speaking with your local West Dundee solar panel installation company is the best first step towards getting all the incentives you qualify for when you switch to solar energy.