2023 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 are meant to help mitigate the cost of installing solar panels on your home. These financial incentives are in place to encourage more homeowners to convert their home partially or fully to renewable energy. You might be eligible for several types of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Illinois government and others from the federal government. Some solar incentives you might qualify for are:

• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement with your Westchester utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in others you may get refunded a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are normally handled by your state government. Once your solar system meets a predetermined threshold (normally 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.
• Rebates: Rebates, or partial refunds after a purchase, are usually applied before any solar tax credits are calculated. These rebates might be given by your local utility company, by your state or by your county.
• Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when calculating property tax for your home.

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 may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of your solar system's cost.

The ITC initially applied to 30% of the total cost of installing a solar system, although that number has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.

Curious how the ITC might apply to your specific situation? Get in touch with your local Westchester solar panel installer to get more information.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. Homeowners can now receive a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. The total credit will then see a slight annual decrease until its expiration. Starting in 2023, it will also be easier to claim credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit will apply to you is to reach out to your local Westchester solar panel company with your questions.

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. These incentives may be provided by your county or municipality, or by the Illinois government. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Westchester

Solar incentives might be offered by your local utlity company, the Illinois government or the federal government. The variety of available incentives has contributed to a large increase in solar energy use in the last 15 years. Call your local solar panel installation company today to find out more information and to save the most money possible on a solar system for your Westchester home.