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

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

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

Solar incentives mitigate the cost of installing solar panels on your home. These financial incentives are designed to encourage more people to make the switch to renewable energy. The incentives might include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the Illinois government 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 in place a net metering agreement with your Westchester utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you may get refunded a percentage of the value.
• Tax Exemptions: These can come in the form of property tax exemptions, which let you ignore the value of your solar system when paying taxes on your house. You may also qualify for an exemption on sales tax at the time of purchase.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or other performance-based incentives. These kinds of incentives are normally handled at the state level.
• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually come off the total price before any tax credits are calculated.

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Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. An incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of the cost of your solar system.

The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006, for you to claim the credit. The ITC initially covered 30% of all system costs (panels, accessories, labor and equipment), although the total amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

To more fully understand how the ITC could apply to your situation, get in touch with your local Westchester solar panel installer and request more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. You are now eligible for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This credit will then be decreased by a few percentage points every year until the date of expiration. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit applies to you, get in touch with your local Westchester solar installation expert.

State & Local Solar Incentives

Tax credits, rebates and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones as well. These incentives — which might 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 Westchester

You can qualify for solar incentives from the federal government and the Illinois government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Talking to your local Westchester solar panel installation expert is the best first step towards getting all the incentives you qualify for when you switch to solar energy.