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

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

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

The term "solar incentives" refers broadly to financial incentives designed to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. These incentives may 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 specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the government. These are different from tax deductions.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if you have a solar system that produces over a specified (generally small) amount of electricity. These types of incentives are typically handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is normally considered part of your taxable income.
• Net Metering: Don't forget to speak to your Wood River utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or 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 Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions allow you to exclude the added value of your solar system when calculating how much property tax you need to pay on your home.

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of your solar system's cost.

The ITC is applied to the total cost of installing a solar system, including the panels themselves as well as labor, accessories and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

Reaching out to your local Wood River solar panel installer is the best way to learn more about how the ITC applies to you.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Now, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 might qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit applies to you is to speak with your local Wood River solar panel installation expert directly.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more might be available at a more local level. These incentives might be handled by the Illinois government, or by your county or municipality. Some are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Wood River

Solar incentives may be offered by your local utlity company, the Illinois government or the federal government. The variety of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. We suggest talking to your local Wood River solar installation company for more information about these incentives and to make sure that you're getting the largest number possible for your solar panels.