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

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

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

Solar incentives are meant to encourage homeowners to switch their home over to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. The incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of Illinois and some by your utility company, county or municipality. Categories of solar incentives include:

• Tax Exemptions: These can come in the form of property tax exemptions, which allow you to ignore the value added by your solar panels when calculating the taxes you pay on your home. They may also include exemptions on sales tax at the time of purchase.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. Typically, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or similar performance-based incentives. SRECs and similar incentives are normally handled by your state government.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. Any rebates you receive will usually come off your total price before tax credits are calculated.
• Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement in place with your Winnetka utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other places you might be refunded a percentage of the value.

Federal Solar Incentives

Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides 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 installing a solar system, and 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, equipment and accessories. 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 owned by you and in the United States.

To best understand how the ITC might apply to you, reach out to your local Winnetka solar panel installation expert and request more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. Under the new program, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 might qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. Your local Winnetka solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Like with federal incentives, these could include tax credits, rebates and more. These solar incentives — which may be handled by the state of Illinois, or by your county or municipality — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Winnetka

The large number of solar incentives available has enormously increased the nationwide adoption of solar energy over the last 15 years. You can get solar incentives from the Illinois government, the federal government or your local utility company. Your local Winnetka solar panel installer can help you learn more about which incentives you should apply for, and get you on track to switch to renewable energy today.