Residential Solar Incentives
The federal government 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 Shines SREC Incentive
- 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.
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.
Federal Investment Tax Credit (ITC)
In 2005, the U.S. Congress passed the Energy Policy Act of 2005 which created the 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.
Additional extensions have been granted allowing more time to capture this major tax incentive for solar. In December of 2020 a new COVID-19 stimulus bill was signed into law by Congress and the President. This bill included important tax credit extensions for solar energy, wind energy and energy technologies including geothermal, fuel cells, microturbines and others.
The COVID-19 Stimulus Bill extends the investment tax credit (ITC) under Section 25D by another two years.
Under these new provisions:
- Solar projects completed in 2021 and 2022 are eligible for this 26% federal income tax credit.
- In 2023, the tax credit is scheduled to drop to 22%.
The ITC will phase out to 0% in 2024 for residential solar arrays.
An ITC for standalone storage batteries were not addressed in this bill, but there is IRS guidance currently in place which examine the potential for an ITC for storage connected with qualified projects. The IRS has also promised additional guidance for an ITC regarding storage.
This solar tax credit is a fantastic incentive for taxpaying entities to take advantage of—while it’s still available!
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.
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.
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.
Ameren Missouri Solar Rebates
Unfortunately the Ameren Missouri Solar Rebate Program ended on December 31, 2023, and is no longer available.
