Illinois tax rebates for solar panels, electric cars, chargers save money and environment

ByJason Knowles and Ann Pistone WLS logo
Tuesday, October 4, 2022
IL tax rebates for solar panels, electric cars save money, environment
Federal and Illinois tax rebates for solar panels, electric cars and charges can help you save money and the environment.

CHICAGO (WLS) -- The new Inflation Reduction Act could help you get relief from rising electric and gas bills while also helping the environment.

The IRA provides rebates if you plan to buy solar panels, an electric vehicle or charges for those vehicles.

Laura Derks of Oak Park installed solar panels on her four-bedroom home and is already seeing the savings on her energy bill.

"These days everything helps," she said.

In fact her electric bill plummeted this summer compared to last.

"It would be $100-$150 and I think the highest bill this summer was $45 when it was in the 90s, in June, you know really warm," Derks said.

On top of that, she cashed in on federal and state credits to reduce the cost of the project.

"We have 18 panels on our roof," she said. "It cost maybe $22,000 to buy the panels, to install and to hook it up. But with the federal tax credit, the state renewable energy credits that it will get down to about $8,000 or $9,000. It will help and it's projected to completely pay for itself in about eight years."

Derks got her credits from previous programs, but under the new Inflation Reduction Act, federal savings have increased from 26% to 30%, and they've been extended for 10 more years.

State credits have also been extended.

"Illinois is leading the way in the nation in regards to state incentives for solar," said Jack Johannesson of Windfree Solar. "So you can get anywhere between 30% and 40% of your project paid off from the Illinois state incentives. Those usually come about 10 months after the project is done, and they're paid as a check to the homeowner."

Johannesson said those state credits are separate from federal credits, which means you may be able to get a total of 80% of your project paid for in Illinois. There are also more credits available for those who qualify in low income neighborhoods, and more. "Both the federal law and the state law both give additional incentives for doing solar in low income communities, low income housing facilities, and also using domestic materials."

Johannesson said some people can get their electric bill to as little as $15 to $20 a month in our area. He hopes a recent installation he did in Downers Grove will provide similar results.

After the sun hits the solar panels, the solar panel energy hits a device that turns it from "natural DC energy" to "double AC energy." That then runs into your home's service panel as well as your ComEd meters.

"You get to use that energy in your house, and get credit for it in your ComEd account." Johannesson said.

Most solar companies will also help walk you through the process and help obtain the government cash back. For more information, check out Solar Power in Illinois:

And if you're looking to be green on the road and save on gas, there are credits on new electric vehicles.

"$7,500 in tax incentives will be going to the people who want to purchase electric vehicles. If you are a single person, you can't make more than $150,000 annually. If you are married and file jointly, you can't make more than $300,000," said Garrett Boorojian, managing partner at WaveCapital Partners.

Boorojian said you may also be eligible if you bought your electric vehicle or EV before the recent legislation.

"There will be some carry over and a person would be able to still have the tax credits available to them," he said.

However, qualifying vehicles must have had final assembly in North America and some those manufacturers have reached a cap of 200,000 EV credits, meaning they are not currently eligible. You can check the U.S Department of Energy's website before you shop.

And don't forget about charging your car. There are also 30% credits available on EV battery chargers which can also run on solar energy.

"When that electricity goes into the grid we're getting credit for it so that reduces our electric bill our electric bill the last few months has been $14," said Jim Lewis of Flossmoor.

There are also state credits available when buying an electric car. You can obtain state and federal cash back even when buying a used electric vehicle.