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

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

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

The term "solar incentives" broadly refers to financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making solar panels more affordable. You may qualify for different kinds of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Illinois and others from the federal government. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled by your state government. Once your solar panel system meets a predetermined threshold (typically 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 from the sale is usually considered part of your taxable income.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from the total price before tax credits are calculated.
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions allow you to ignore the value that your solar panels add when you're calculating how much property tax you need to pay on your house.
• Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement in place with your Westmont utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in others you may make back a percentage of the value.

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Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of the cost of your solar system.

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

Reaching out to your local Westmont solar panel installer is the best way to learn more about how the ITC applies to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. After this, the percentage will decrease slightly each year until the program expires in 2035. 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 understand how the new Clean Energy Credit will apply to you, speak with your local Westmont solar installers.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. Similar to federal incentives, these could include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. These local incentives could come from your county or municipality, or from the Illinois government.

Next Steps for Installing Solar in Westmont

Solar incentives might be offered by the federal government, the Illinois government or your local utility company. The large number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. If you're prepared to make the switch to solar energy, getting in touch with your local Westmont solar panel installation expert is a great first step.