Incentives & Grants
The federal government currently offers a renewable energy tax credit. Rather than being a typical deduction that applies to your taxable income, this credit reduces your tax liability and may be carried forward to the next taxable year if it exceeds your tax liability. The current federal tax credit is 26% of the cost of your system and applies to systems installed through 2022, after which it steps down to 22% for systems installed in 2023. It is currently set to expire at the end of 2023, and there is no federal tax incentive for 2024 and beyond yet.
The State of Illinois’ Solar Renewable Energy Certificates (SREC) program offers incentives to home and business owners who install solar, and these incentives can offset 30% to 45% of the cost of installation. These incentives are production-based, meaning the amount varies depending on how much a system produces. The time table for payout of the incentives is also based on system size. Smaller systems (25kW or less) receive the incentive as a lump-sum 9-12 months after commissioning, and larger systems (over 25kW) receive a quarterly payout over a five-year period.
The USDA’s Rural Energy for America Program (REAP) offers financial incentives to agricultural producers and rural small businesses. Depending on your eligibility, these grants can cover up to 25% of the cost of eligible solar installations.
The federal Modified Accelerated Cost-Recovery System (MACRS) allows businesses to recover investments in renewable energy through a depreciation deduction. This deduction can cover 25% or more of a system’s cost, and for 2022, solar installations qualify for 100% first-year bonus depreciation.
Navigating all of these programs can seem daunting, but we are committed to looking for any grant or incentive that might apply to your system. Our goal is to simplify the process and get you the best possible return on your investment.