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

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

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

Solar incentives encourage people to switch to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. The incentives could 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 utility company, county or municipality. Some solar incentives you might qualify for are:

• Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your Wood Dale utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in others you might be refunded a percentage of the value.
• Rebates: Solar rebates may be provided by your state or county, or by your local utility company. These rebates work as partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions let you ignore the value that your solar panels add when you're calculating the amount of property tax you need to pay on your home.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or similar performance-based incentives. Incentives like these are generally handled at the state level.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.

The ITC was originally for 30% of the total cost of installing a solar system, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. 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 applies 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.

Your local Wood Dale solar panel installer can offer more information about the ITC and how it might apply to your situation.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can receive a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit will apply to you is to talk with your local Wood Dale solar panel installers.

State & Local Solar Incentives

There are more than just federal solar incentives; tax credits, rebates and more may be offered at the state and local level. These incentives might be provided by the Illinois government, or by your county or municipality. Some are available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Wood Dale

The expanding number of available solar incentives has helped tremendously increase the nationwide adoption of solar energy over the last 15 years. You may receive solar incentives from the Illinois government, the federal government or your local utility company. When you're ready to make the switch to solar energy, calling your local Wood Dale solar panel installation expert is a great first step.