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.