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

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

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

The term "solar incentives" refers to a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various types of incentives, like cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be offered by the Illinois government, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Woodridge utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
• Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce over a specific (normally small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically given by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. Rebates can be offered by your local utility company, by your county or by your state.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Tax exemptions may come in one of two forms. The first 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 paying property tax on your home.

Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of 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 gives you a credit on your taxes equal to a percentage of the cost of your solar system.

The ITC applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC initially covered 30% of all installation costs (panels, equipment, labor and accessories), although the amount has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

Speaking with your local Woodridge solar panel installer is the best way to understand how the ITC may apply to you.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. After 2033, the percentage will 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.

More information about the new Inflation Reduction Act can be found here. Your local Woodridge 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

Not all solar incentives are federal; tax credits, rebates and more might also be offered at the local or state level. Some incentives are ongoing, while others are available for a limited time. These incentives may be given by the Illinois government, or by your county or municipality.

Next Steps for Installing Solar in Woodridge

The variety of available solar incentives has enormously increased the nationwide adoption of solar energy over the past 15 years. You can get solar incentives from the federal government, the Illinois government or from your local utility company. If you're prepared to make the switch to solar energy, talking to your local Woodridge solar panel installation expert is a great first step.