No. If you receive a rebate from the installer, that is the same as a price discount from any other merchant, and is not taxable. BUT, you must figure the 30% solar credit on your net price after the rebate, not the gross price. If you already filed your tax return, you need to file an amended return to change the cost you used for the solar energy credit, and repay part of the credit.
If you receive money from the electric utility as an incentive, that is taxable miscellaneous income, but it does not reduce the cost of the installation or the allowable credit.
If I receive a grant from the State is this consider taxable income? And is it removed from the 30% rebate cost or is this considered part of installation costs?
It depends.
What state issued the grant and was it specifically provided to you to install the solar panels?
In regards to the credit, you would only be able to use the amount that it actually cost you during the year. If part of the costs were paid by that grant, you would reduce the cost by the grant amount to determine the amount of the credit you are entitled to.
If I receive a rebate from my power company, for installing solar, is this taxable income?
Not only will it not be taxable, it won't even reduce the amount of credit you receive on the federal side. In other words, you won't need to deduct this rebate from the cost of your solar system to apply your federal credit.
Sorry about the duplicate question, my only intention was to get clarity on the different category of rebates. The power company offers rebates other than the ones offered from the installer. I will advise that any money a solar system owner receives from a utility company as an incentive, is not taxable income in Illinois.