Residential Solar Incentives

The federal government strongly encourages renewable energy by offering a 30% Investment Tax Credit, or ITC. State government may offer other great incentives too. What are you waiting for? Take advantage of these benefits while they last. Opportunities available for homeowners and farms (and small/large businesses, too) consist of:

  • – Investment Tax Credit (ITC) / 30% Federal Tax Credit
  • – State Incentives: SREC / Rebates
  • – Illinois Solar Incentives
  • – Missouri Solar Incentives
  • – USDA REAP Grants for Farms & Rural Small Businesses
  • – And more!

A Tick Tock Energy sales consultant can help you identify both State and Federal solar incentives for your area and help optimize your investment.

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30% Federal Investment Tax Credit (ITC)

In 2005, the U.S. Congress passed the Energy Policy Act of 2005, which created the 30% Federal Investment Tax Credit for residential (and commercial) solar energy systems. These solar tax credits are a dollar-for-dollar reduction in the income taxes that a person or company claiming the credit would otherwise pay the federal government. At the end of 2015, Congress extended the ITC for solar projects completed by the end of 2023.

The ITC is equal to 30 percent of the basis that is invested in the eligible solar installation that have commenced through 2019. Starting in 2020, the ITC steps down to 26%, then to 22% in 2021. After December 31, 2022, the residential credit will drop to 0% (commercial will drop to 10%).

This solar tax credit is a fantastic incentive for taxpaying entities to take advantage of—while it’s still available!

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Can’t Take the Tax Benefits?

For farms in corporate entities that can’t monetize the solar tax credit, a solar operating lease is a great alternative. A solar lease may allow the lessor to capture the tax benefits enabling the lessee to enjoy a lower monthly lease payment.

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Illinois Solar Renewable Energy Credits (SRECs)

Illinois SRECs provide an outstanding solar incentive that helps owners recoup a solar system’s investment. These energy credits, which are available in Illinois and other select states, have been created to help states meet Renewable Portfolio Standards (RPS). These RPS set goals for generating a percentage of that state’s overall electricity from renewable energy. In Illinois, for example, an SREC can potentially cover 20% to 40% of the total solar investment.

Typically, one SREC equals 1,000 kilowatt-hours (kWh) of solar energy generated. SRECs accrue as solar electricity is generated, and are typically paid out quarterly or other interval defined by each state.

If your state does not have an SREC program, your residential or farm solar project may still be eligible to sell the SRECs it generates into another state’s market. For example, homeowners and farmers in states surrounding Illinois—such as Missouri, Indiana, Kentucky, Wisconsin, and Iowa—can potentially sell their solar system’s SRECs into the Illinois market.

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USDA REAP Grant for Agricultural Producers

For farms, a USDA REAP grant can potentially provide grant funding for renewable energy projects (wind or solar) or energy-efficiency retrofits. These grants also provide loan guarantees used to finance energy projects.

This grant program is available to agricultural producers with at least 50% of gross income coming from agricultural operations. The USDA REAP grant can provide up to 25% in grant funding, and is also available for small businesses in rural areas. This grant is highly competitive, but can provide financial assistance if awarded. Tick Tock Energy provides grant-writing services and has a great track record of helping our clients land solar grant-funding.

Keep in mind solar grant funding is also considered taxable income.

Contact Tick Tock Energy today to speak with a knowledgeable sales consultant who can help you further understand and navigate the available solar grant options, and identify state or federal solar incentives for your home or farm, or commercial solar incentives as well.

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