2023 Solar Incentives Guide for Lillington, NC - Tax Credits & Rebates

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

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

Solar incentives are intended to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. The incentives can include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the North Carolina government 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 are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are usually handled by your state government. Once your solar panel system meets a certain threshold (normally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
• Tax Exemptions: Your solar panel system could qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when calculating property taxes on your house.
• Net Metering: Net metering factors in after your solar panels are up and running. If you have in place a net metering agreement with your Lillington 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 others you might make back a percentage of the value.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a certain percentage of your solar system's cost.

The ITC can be applied to solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.

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

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. At this point, the credit percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.

More information about the new Inflation Reduction Act can be found here. Your local Lillington solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Federal solar incentives are not your only option; rebates, tax credits and more may be offered at the state and local level. These incentives may be distributed by the North Carolina government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Lillington

Solar incentives can be provided by the North Carolina government, the federal government or your local utility company. The growing number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. Reaching out to your local Lillington solar panel installation company is a great first step towards getting the most money possible when you switch to solar energy.