2024 Solar Incentives Guide for Aurora, IL - Tax Credits & Rebates

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

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

Solar incentives are designed to mitigate the cost of installing solar panels on your home. These financial incentives are designed to encourage more people to make the switch to renewable energy. You may qualify for different types of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Illinois government and others from the federal government. Some solar incentives you might qualify for are:

• Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when calculating property taxes on your house.
• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. Any rebates you receive will usually come off the total price before tax credits are calculated.
• Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Aurora utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you may get refunded a percentage of the value.
• Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the federal government. Tax credits are different from tax deductions.
• Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a specified (normally small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically offered at the state level. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.

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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 probably the most commonly known federal solar incentive. The ITC offers a tax credit for a specific percentage of your solar system's cost.

The ITC applies to solar systems installed after January 1, 2006, on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost – for panels, labor, equipment and accessories – although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.

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

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. This percentage will then begin to decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit will apply to you, talk to your local Aurora solar installation company.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. Like with federal incentives, these might include tax credits, rebates and more. Some incentives are ongoing, while others are offered for only a limited time. These local incentives might come from the Illinois government, or from your specific county or municipality.

Next Steps for Installing Solar in Aurora

You can receive solar incentives from the federal government and the Illinois government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Getting in touch with your local Aurora solar panel installer is a great first step towards getting the most money possible when you switch to solar energy.