Incentivizing Solar Adoption: Tax Credits, Rebates, and Incentives for Illinois Residents

Switching to solar power can come with a high price tag, averaging between $12,835 and $17,365 in Illinois. However, residents of the Prairie State may have access to various tax credits and incentives that can help minimize expenses and increase potential savings.

Illinois Residents Can Save on Solar: Available Tax Credits and Rebates

If you reside in Illinois, there are numerous state and local incentives for solar power that you may be eligible for. To find out more about the available options that fit your qualifications, read on below.

Illinois Shines (Statewide)

In Illinois, the Solar Renewable Energy Credits (SRECs) program is a unique offering not available in many other states. Also referred to as the Adjustable Block Program, the Illinois Shines initiative has gained immense popularity, with its funding running out initially and applications being put on hold until December 2021. Nevertheless, as per the Climate and Equitable Jobs Act, the program is now active again. Here’s how it works:

  • Homeowners will receive one SREC for every 1,000 kilowatt-hours (kWh) of energy that their solar panel system generates.
  • SRECs can be sold to local utility companies at market rates.
  • To qualify for SRECs, you must work with an approved vendor.

Illinois utilities are mandated to generate at least 25% of their power from renewable sources by 2025 under Renewable Portfolio Standards. Purchasing SRECs from homeowners is one method for these businesses to achieve this objective.

Despite the high demand for the Adjustable Block Program, there is currently a wait-list. Check out the Illinois Shines website for more information.

Illinois Solar for All (Statewide)

The Illinois Solar for All (ILSFA) program is a three-part initiative that caters to low-income households and non-profit organizations. Individuals with limited financial resources can participate in community solar projects or invest in solar panel installations at minimal costs.

The program collaborates with authorized vendors who can earn Renewable Energy Credits (RECs) by engaging in this program. These RECs can be sold at a profit, and the savings can benefit homeowners by eliminating upfront expenses while ensuring energy savings.

Under the ILSFA umbrella, there are three programs available:

  • Low-Income Distributed Generation
  • Low-Income Community Solar
  • Nonprofit Organizations and Public Facilities

Each of these initiatives has distinct advantages. You can visit the Illinois Solar for All website to determine eligibility for any of these programs.

City of Chicago Green Building Permit Programs (City-wide)

If you are a qualifying applicant, the Green Building Permit Program can provide you with an expedited permit application process and potential reductions on permit fees, which can save both time and money during solar installation. This program is not restricted to residential solar systems only. It covers numerous projects, including:

  • Geothermal systems
  • Green roofs
  • Photovoltaic (PV) panels
  • Rainwater harvesting
  • Solar thermal panels
  • Wind turbines

You can find more information about this program by visiting the City of Chicago’s website.

Property Tax Breaks

Illinois provides a property tax exemption to homeowners who install a residential solar system, implying that despite an increase in property value, property taxes will not be affected.

The tax exemption applies to both active and passive solar energy systems. For instance, if you install a rooftop solar system and a sunroom addition, you could qualify for a tax exemption on both, allowing homeowners to realize maximum savings by installing multiple solar elements.

You may obtain additional information on available tax incentives and apply by visiting the Illinois state website. Additionally, it is advisable to check with local authorities to identify other potential tax breaks in your area.

Net Metering in Illinois

Besides availing solar incentives, you may be eligible for an Illinois net-metering program, commonly referred to as net energy metering (NEM). These programs offer credits to solar owners for the surplus energy their systems generate. These credits can be applied to utility bills in the future, resulting in reduced energy costs.

The following are the primary utility companies in Illinois that participate in net metering. Applications are processed on a first-come, first-served basis.

  • Ameren Illinois Utilities
  • Commonwealth Edison (ComEd)
  • MidAmerican Energy Company

You can obtain additional information by visiting the Illinois Attorney General’s website.

Federal Solar Tax Credit

Residents of Illinois can also take advantage of the federal solar Investment Tax Credit (ITC). This tax credit permits homeowners to claim a deduction equal to 30% of their solar installation costs on their federal tax returns.

To qualify for the ITC, you must own your solar panel system. Only residents who purchase their solar systems outright or finance them through a loan are considered owners. Customers who lease or sign a Power Purchase Agreement (PPA) are not eligible since their systems are owned by a third party.

Illinois Solar Incentives: Maximizing Savings and Benefits

Residents of Illinois have access to a range of federal, state, and local incentives that can help reduce the cost of solar installation. Moreover, depending on energy consumption and the local utility provider, homeowners may even be eligible to earn money through net-metering programs. To assist you in initiating the installation process, just fill out a solar incentive quiz to know if you are eligible and will do the heavy lifting so you can take advantage of these solar incentives for Illinois residents.

Illinois Solar Incentives: Answering Your Most Commonly Asked Questions

Is there a solar tax exemption available in Illinois?

No, Illinois does not have a statewide solar tax exemption. However, homeowners in Illinois can still benefit from the federal Investment Tax Credit (ITC), which allows for a federal tax credit equivalent to 30% of their total solar installation costs. Additionally, Illinois provides property tax exemptions to those who have installed solar systems.

Is there a net-metering program available in Illinois?

Illinois has a net-metering program that can provide homeowners with electric bill credits for any surplus energy generated by their residential solar systems. This initiative is offered by major utility companies such as Ameren Illinois Utilities, Commonwealth Edison, and MidAmerican Energy Company.

Are there any incentives offered for installing solar panels in Illinois?

Absolutely! Illinois provides multiple incentives for solar panel installation, which are discussed in this article. These incentives consist of Illinois Shines, Illinois Solar for All, and the City of Chicago Green Building Permit Program.

Going Solar in Illinois: A Comprehensive Guide to Solar Panel Pricing and Incentives with Solar Home Illinois

Illinois has made significant investments in its sustainable energy future, with a focus on incorporating solar power into the state’s energy mix. Over the past decade, the state has created policies, plans, and incentives to encourage homeowners to adopt solar energy solutions. If you are an Illinois resident considering investing in solar energy, it’s important to understand the various options available to you.

Solar Power in Illinois

Illinois has established a flourishing solar market with policies, plans, and incentives that incentivize residents and organizations to invest in sustainable energy. The state’s Renewable Portfolio Standard (RPS), first introduced in 2007 and updated through the “Future Energy Jobs Act” and the “Climate and Equitable Jobs Act,” mandates that the state generates 25% of its energy from renewable sources by 2025. The Solar Energy Industries Association predicts that the amount of solar capacity installed in Illinois will increase by over 1,700% in the next five years.

Illinois has invested more than $2 billion in solar energy, generating over 5,000 jobs with exponential growth expected. In the last five years, the cost of solar has decreased by 4%, and installations have increased by over 2,000%.

State incentives support Illinois residents and organizations who go solar, including rebates for excess energy produced and programs that assist or eliminate the financial burden of equipment and installation. These incentives complement the federal solar tax credit, all designed to benefit homeowners who invest in solar.

Illinois is dedicated to achieving 100% sustainable energy by 2045, with specific carve outs for energy generated from solar (SRECs).

Cost of Solar Panels in Illinois

According to EnergySage, the average solar panel cost in Illinois before tax is $3.04/W as of April 2022. However, the actual cost varies based on system size. Purchasing panels in bulk can result in a lower cost per watt.

For a five-kilowatt (kW) solar system, the average installation cost in Illinois ranges from $12,920 to $17,480. Keep in mind that your net price will likely decrease by thousands of dollars after factoring in federal tax credits and other state and local incentives.

In addition to equipment and installation costs, the overall expense of going solar also includes permitting fees, inspection costs, and installer profit margins, which will vary depending on the region and company chosen.

Tax Credits from the Federal Government to Encourage Solar Energy Investment

If you meet the criteria established by the U.S. Department of Energy, installing a solar system in 2022 could make you eligible for federal tax incentives. To qualify, you must own your home, use new solar panels or panels being used for the first time, and own your solar panels.

By taking advantage of the solar investment tax credit, you can claim 26% of your total project costs (including equipment, permitting, and installation) as a credit on your federal tax return. Each dollar credited means one less dollar owed in taxes the following year. It is essential to note that this is not a tax refund; instead, you must owe taxes to be eligible and claim the reduction in what you owe.

The federal solar investment tax credit is available to all states at 26% for home solar systems purchased and installed by December 31, 2022, and will decrease to 22% in 2023.

Illinois Offers Rebates and Tax Credits for Solar Power Transition

While there is no tax credit available in Illinois for solar panels, the state offers several incentives to support the development of new solar energy generation and help residents offset costs.

One such initiative is the Illinois Shines program, which offers a Solar Renewable Energy Credit (SREC) to homeowners for every 1,000 kilowatt-hours of energy produced by their solar panels. These credits can be sold to local power companies that are mandated to generate at least 25% of their electricity from clean sources by 2025 as part of the state’s Renewable Portfolio Standard.

The Adjustable Block Program, also known as Illinois Shines, was so successful that it ran out of funding and was unable to accept new applications in 2021. However, following the Climate and Equitable Jobs Act passed in September 2021, the program was reactivated and officially reopened in December of the same year.

Illinois Solar for All (ILSFA) is another state incentive available to income-eligible homeowners, renters, nonprofits organizations, and public facilities. Under this program, eligible participants partner with ILSFA Approved Vendors to receive affordable solar installations with either zero or reduced upfront costs. They then pay a reduced fee for the energy produced over time.

In summary, although Illinois does not have a tax credit for solar panels, the state offers a range of incentives, including the SREC program and Illinois Solar for All, to make solar energy more accessible and affordable for its residents.

Solar Net Metering

Through solar net metering, homeowners can earn utility credits by “cashing in” excess energy produced by their solar systems that they don’t use. Local power companies are required by law to provide full credit to solar system owners for all surplus electricity generated and exported to the power grid. This arrangement also benefits utility companies as they can supply the additional solar electricity to other buildings on the same grid.

Rebates from ComEd

ComEd, the largest electric company in Illinois, provides a rebate for nonresidential solar systems. The rebate amounts to $250 per kilowatt of solar capacity up to 2,000 kW.

Illinois Property Tax Exemption for Solar Energy Systems

In Illinois, the increase in home value resulting from installing solar panels is not subject to taxation.

Exclusive Incentives

Your city, county, or power company may offer additional solar incentives that are specific to your area.

Choosing the Right Solar System for Your Home

To ensure that you select the best solar system for your home, it is crucial to understand your property’s energy efficiency and solar potential. The U.S Department of Energy advises homeowners to evaluate their total electricity usage and optimize energy efficiency before investing in solar. Conducting a home energy audit can help identify areas where energy loss or over expenditure can be minimized.

Various online tools are available to project a property’s suitability for solar panels, such as the Solar Energy Technologies Office (SETO) solar rooftop potential and Sun Number Score technology. Google’s Project Sunroof also offers an estimate of a roof’s solar savings potential.

Homes that are suitable for solar panels typically have good roof conditions, slightly sloped south-facing roof surface area, and receive adequate sunlight. However, even if the roof is in poor condition, too small, gets too much shade, or cannot withstand solar panels, solar energy can still be utilized.

Community solar installations allow customers within a geographical area to buy or lease panels from an off-site array. Similar to homeowners who own their solar panels, community solar customers receive credits on their electric bill for the electricity generated by their share. For renters who do not own their homes but wish to use solar resources, community solar is an excellent option.

The Advantages of Switching to Solar Energy

  • Solar energy is a clean, renewable, and sustainable energy source that reduces your carbon footprint, lessens the strain on the electrical grid, and creates zero pollutants.
  • Tax breaks and rebate incentives are available for those who install solar systems, resulting in significant financial benefits.
  • Installing solar panels increases your home’s value and can lower or eliminate your energy bills, providing a high return on investment.
  • The cost of going solar has decreased as the demand for clean energy has increased, making solar energy more accessible and creating jobs in the clean energy sector.

Tips for Selecting the Top Solar Panel Company in Illinois

When evaluating solar panel companies, it’s essential to consider various factors to ensure that you maximize your investment and achieve a net positive return.

  • Evaluate the efficiency of each solar panel company’s panels, including their power rating, power tolerance, efficiency, and temperature coefficient, to understand how much energy they can generate. Compare this to the industry average solar panel efficiency of 16% to 18%, as the most efficient panels may not always offer the best cost per kW ratio.
  • Check the solar panel company’s production quality, equipment durability, warranties, and assurances, with a focus on manufacturer warranty that averages between 10 to 25 years. Make sure the panels can withstand outdoor stress if you live in an area with adverse weather conditions.
  • Review certifications, licenses, warranties, reviews, and local reputation when selecting a solar panel company. The best companies will have a knowledgeable, full-time team that can provide support throughout the installation and life of your solar system.
  • Look for state and regional incentives for going solar, as well as any local benefits that may be available. You could save money by choosing a local solar company, according to a study by the National Renewable Energy Laboratory (NREL) that found larger companies typically cost an average of 10% more than smaller, local solar companies for the same or lesser quality equipment.
  • Consider working with SunVibe Solar, which offers high-quality solar panels with exceptional customer service and competitive pricing.

Illinois Solar Frequently Asked Questions:

What are the benefits of transitioning to solar energy in Illinois?

Illinois offers significant support and benefits for individuals seeking to switch to clean energy, thanks to its Renewable Energy Standard (RES) policy. According to SEIA, RES policies do not significantly increase electricity rates, and often result in cost savings for consumers. The Illinois RES policy also boosts local demand for solar technology, leading to job creation and economic development. Additionally, income-eligible homeowners and organizations in Illinois may qualify to go solar at zero upfront costs with state incentives.

According to Google’s Project Sunroof, the average home in Illinois can save approximately $8,000 over 20 years following the purchase of a solar system.

What tax exemptions and rebates are available for solar energy systems in Illinois cities?

While there aren’t any specific tax credits available for solar panels in Illinois, any new solar energy systems installed in the state are exempt from an increase in property taxes, which increases the value of your property. Additionally, statewide rebates are offered through the Illinois Solar Renewable Energy Credit (SREC) program. The rebate amount is based on the amount of excess energy your solar system produces.

To figure out potential savings based on your zip code and utility company, you can use solar calculators that analyze your data.

For those looking to install solar panels, SunVibe Solar is a provider that offers high-quality solar panels at competitive prices with exceptional customer service.

Should I consider buying or leasing solar panels?

The answer to this question depends on your specific situation. If the primary goal of going solar is to earn positive returns, it’s essential to evaluate the costs associated with buying versus leasing. You should also consider your home’s potential solar efficiency.

In some states, tax benefits and rebates are only available to homeowners who purchase their solar panels. This can result in significant cost savings over time. However, if your home cannot support solar panels, or if you are a renter looking to benefit from lower energy bills without investing significant upfront installation costs, leasing solar panels may be the best option for you. Community solar programs may also be available in your area, which may provide additional options for accessing solar energy.