Welcome to Solar City STL, your go-to resource for all things solar in the St. Louis area. Explore the benefits of solar energy and learn about the federal solar tax credits available for businesses and other entities. Our website offers valuable information on how you can take advantage of these tax credits to make your solar investment more affordable.
Federal Solar power Incentives for Missouri homeowners
The Residential Clean Energy Credit, previously known as the Investment Tax Credit (ITC), has been extended to 2034 and now offers 30% in tax credits to consumers who purchase solar panels. The increased credit can be retroactively applied to solar systems purchased at the beginning of 2022.
The Solar Tax Credit was formally set to expire in 2024 but will now remain at 30% through 2032. It will drop to 26% in 2033 and 22% in 2034. It is set to expire in 2035 unless it is renewed again.
Rural Energy for America Program Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans & Grants
The program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Agricultural producers may also apply for new energy efficient equipment and new system loans for agricultural production and processing.
What is an eligible area?
- Businesses must be in located in rural areas with populations of 50,000 residents or less.
- Check eligible business addresses.
- Agricultural producers may be in rural or non-rural areas
Federal Solar Tax Credits for Businesses
Are you a business owner, nonprofit organization, or local government entity planning to install a solar energy system? You may be eligible for federal investment and production tax credits. These credits can significantly reduce your federal income tax liability and make solar energy more financially viable for your organization.
Domestic content bonus tax credit
To be eligible for the domestic content bonus, all structural steel or iron products used must be made in the United States. Additionally, a certain percentage of the total costs of manufactured products, including components, must be mined, produced, or manufactured in the United States. This percentage is determined by dividing the cost of domestically manufactured products and components by the total cost of all manufactured products.
Projects that meet the minimum domestic content requirements are entitled to a 10 percentage point increase in the value of the Investment Tax Credit (ITC) or a 10 percent increase in the value of the Production Tax Credit (PTC). For example, a 30% ITC would be increased to 40%, or a 2.75 ¢/kWh PTC would be increased by an additional 0.3 ¢/kWh.
The required percentage of manufactured products varies based on the year of construction. For projects beginning construction before 2025, the minimum requirement is 40%. It increases to 45% for projects starting construction in 2025, 50% for projects starting construction in 2026, and 55% for projects beginning construction after 2026.
On May 12, 2023, the IRS issued guidance regarding the domestic content bonus. The guidance includes a non-exhaustive list of solar PV steel products, manufactured products, and components that taxpayers can use for classification purposes. Examples of these products and components include steel photovoltaic module racking, pile or ground screws, steel or iron rebar in the foundation (e.g., concrete pad), PV modules, PV trackers, and inverters.
Production Tax Credit (PTC)
The PTC is a per kilowatt-hour tax credit for electricity generated by solar and other qualifying technologies. It applies to the first 10 years of a system’s operation. Like the ITC, the PTC can help reduce your federal income tax liability, and it is adjusted annually for inflation.
Investment Tax Credit (ITC)
The ITC is a tax credit that allows you to offset a portion of the cost of installing a solar system in the tax year. By taking advantage of the ITC, you can reduce your federal income tax liability by a percentage of the system’s cost.
Energy community bonus tax credit
An energy community can be defined in one of three ways:
- It could mean a brownfield site, which refers to an area contaminated by harmful substances, pollutants, or contaminants (excluding petroleum), inclusive of certain lands scarred by mining.
- It could refer to a region that, subsequent to 2009, has had either 0.17% or more direct employment or more than 25% of local tax revenues tied to activities such as extraction, processing, transport, or storage of coal, oil, or natural gas, and where the unemployment rate equals or surpasses the national average of the preceding year.
- It could also signify a census tract where a coal mine was shut down after 1999 (including any adjacent census tract), or where a coal-fueled electric generating unit was decommissioned after 2009.
Projects that are located within an energy community are qualified to receive a 10-percentage-point increase in the Investment Tax Credit (ITC) value (for instance, an extra 10% for a 30% ITC, resulting in a total of 40%), or a 10 percent rise in the Production Tax Credit (PTC) value. For more details, you can refer to the latest guidance from the Treasury and their map.
low-income bonus tax credit
The low-income bonus is reserved only for projects that utilize the Investment Tax Credit (ITC) and is restricted to a yearly 1.8 GWdc program cap. This bonus grants projects with a capacity under 5 MWac either:
- An extra 10% ITC if they are situated in a low-income community as determined by the New Markets Tax Credit (Category 1) or on Indian land (Category 2).
- An additional 20% ITC if they are categorized as a “qualified low-income residential building project” (Category 3) or a “qualified low-income economic benefit project” (Category 4). To be eligible for the credit, the financial gains from the solar facility must be fairly distributed among the residents.
The IRS will distribute the 1.8 GW program cap to projects and can roll over any unutilized annual allocation for a period of three years.
For 2023, the IRS has suggested allocating capacity according to the following list:
Category 1 (Low-Income Community Location): 700 megawatts
Category 2 (Indian Land Location): 200 megawatts
Category 3 (Qualified Low-Income Residential Building Project): 200 megawatts
Category 4 (Qualified Low-Income Economic Benefit Project): 700 megawatts
Additionally, 560 MW of Category 1 is planned to be reserved for residential behind-the-meter facilities.
A 60-day application period will be opened (the starting date is yet to be announced), after which a rolling application process will continue if a category is below its allocation. A lottery system will be employed for categories exceeding their allocation. Priority will be assigned to applications that meet particular ownership and location criteria. The IRS and Treasury are also contemplating other priority parameters but these have not been finalized. Only project owners can apply; projects cannot apply for more than one category; and purposefully splitting projects to fall under the 5 MWac cap is prohibited.
Projects must be finalized within four years after receiving the allocation and cannot be operational before getting an allocation. There are stringent conditions regarding any changes to project size, location, ownership, and benefit distributions after allocation.
For further details, please refer to the most recent Treasury guidance for 2023.
Ameren Missouri Solar power Incentives
July 1, 2019-December 31, 2023–$0.25 per watt. An average system is about 8,000 watts. An average rebate is around $2000. Will vary based on system size.
Maximum solar system size for a solar rebate for a Residential customer is
25 kW
Maximum solar system size for a solar rebate for a Commercial or
Industrial customer is 150 kW.
What is net metering?
It is a meter that can measure the flow of electricity in 2 ways. It measures how much energy comes from Ameren (kWh delivered) when the solar system is not producing electricity like at night. It also measures the difference between what is generated by the solar system and the customers load. It does NOT measure the solar systems total production.
As the system is producing electricity, this energy is used to meet the customer’s electric requirements. If more energy is produced than used this electricity is fed to the utility. This is typically during daylight hours. The bi-directional meter records this. At night when the solar is not producing the customer is using electricity from Ameren. If the customer produces more that they use they will see a credit on their energy statement.
Illinois Solar power Incentives
Federal Solar power Incentives
The Residential Clean Energy Credit, previously known as the Investment Tax Credit (ITC), has been extended to 2034 and now offers 30% in tax credits to consumers who purchase solar panels. The increased credit can be retroactively applied to solar systems purchased at the beginning of 2022.
The Solar Tax Credit was formally set to expire in 2024 but will now remain at 30% through 2032. It will drop to 26% in 2033 and 22% in 2034. It is set to expire in 2035 unless it is renewed again.
Rural Energy for America Program Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans & Grants
The program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Agricultural producers may also apply for new energy efficient equipment and new system loans for agricultural production and processing.
What is an eligible area?
- Businesses must be in located in rural areas with populations of 50,000 residents or less.
- Check eligible business addresses.
- Agricultural producers may be in rural or non-rural areas
Ameren Illinois Solar power Incentives
Once you have set up Distributed Generation with Ameren Illinois, you may be eligible to net any electricity you generate using qualifying renewable resources against the electricity supplied to you by Ameren Illinois or a retail electric supplier. With Net Metering, you can apply revenues from your power generation against your Basic Generation Service costs (Supply Section of the bill) with Ameren Illinois.
The Net Metering Rule requires utilities and retail electric suppliers to provide financial credits for renewable fuel-generated electricity that offset the amounts that otherwise would have been supplied by the customer’s electricity provider during a billing period. For customers served under Delivery Service tariffs DS-1 or DS-2, credits in excess of their monthly usage will be carried over to future billing periods. Please note that switching electric suppliers will cause any accumulated electric supply credits to expire.
Customers receiving service under Ameren Illinois’ Rider NM-Net Metering tariff and use an approved Smart Inverter may qualify for a “Smart Inverter Rebate.” An inverter is a device that changes the output from a generator (like solar panels) from direct current (DC) into the alternating current (AC) used by Ameren Illinois’ electric distribution system. A “smart” inverter is a device that performs the DC/AC conversion and capable of communicating, and being operated, remotely by a third party like Ameren Illinois.
In Illinois, Net Metering customers who use Smart Inverters to interconnect their generator to the utility’s electric distribution system may qualify for a payment or rebate from their utility. The amount of the rebate depends on the nameplate capacity of the generator to which the inverter is connected. Click here to learn about the technical capabilities and settings that an inverter must have in order to be considered a “Smart Inverter” in Illinois. If your inverter meets these specifications, and you are a Rider NM-Net Metering customer, click here to fill out your application for a Smart Inverter rebate.
It is a meter that can measure the flow of electricity in 2 ways. The meter measures how much energy comes from Ameren (kWh delivered) when the solar system is not producing electricity like at night. It also measures the difference between what is generated by the solar system and the customers load.
However, the Ameren meter does NOT measure the solar systems total production. As the system is producing electricity, this energy is used to meet the customer’s electric requirements. If more energy is produced than used this electricity is fed to the utility. This is typically during daylight hours. The bi-directional meter records this. At night when the solar is not producing the customer is using electricity from Ameren. If the customer produces more that they use they will see a credit on their energy statement.
Illinois Solar Renewable Energy Credits (SRECs)
Solar is hot in Illinois! Here’s why: Illinois is one of just a few states that pay you to generate clean electricity from solar and wind renewable energy systems. The incentive is called a Solar Renewable Energy Credit (SREC), and it’s administered by the Illinois Shines Program. It’s a perfect incentive for businesses, farms, homes, non-profits, government buildings, others to take advantage of.
Illinois SRECs help those solar system owners recoup their investment. Additionally, SRECs help bring a cleaner and diversified electrical power system to the state of Illinois. Watch the video below.
See If you qualify for Solar power Incentives. Click Here!
