Energy News Today

Illinois Solar Incentives: 2022 Tax Credits & Rebates

The solar energy industry is booming in Illinois, with a projected 1,700% increase in solar capacity over the next five years. For homeowners considering going sun-powered in the state, there are a number of Illinois solar incentives to take advantage of.

While there is no Illinois tax credit for solar panels, there are renewable energy credits up for grabs, as well as plenty of other local and statewide incentive programs that can help you save money on your renewable energy system.

In this article, we will provide an overview of all the incentives available for solar power systems in Illinois. Or, to see how much a system would cost (and how much you can save) right away, you can get a free quote from a top solar company near you by using this tool or filling out the form below.

Illinois Solar Renewable Energy Credits

Illinois is one of the few states with a Solar Renewable Energy Credit (SREC) program, which is officially called Illinois Shines. You get one SREC for every 1,000 kilowatt-hours produced by your solar panels. These credits can then be sold to local power companies that are subject to the state’s Renewable Portfolio Standard, which mandates they generate at least 25% of their power from clean sources by 2025.

With SRECs, you save the value of that electricity on your power bills, and you get an additional payment for every 1,000 kWh. As of December 2021, SRECs are trading above $70 per credit in Illinois, and many homes generate over 1,000 kWh per month.

The Illinois Shines SREC program opened on January 30, 2019. The program was so successful that it ran out of funding, and no new applications were accepted to join the program in 2021. However, the Climate and Equitable Jobs Act was signed on September 15, 2021, and it reactivated the Illinois Shines program on December 14.

Other Illinois Solar Incentives

Illinois Shines is not the only solar incentive program in the state — residents also have access to low-cost panels, a favorable net metering policy and solar property tax exemptions. If you’re a nonresidential customer of Commonwealth Edison (ComEd), the largest electric company in the state, you can also qualify for the Illinois solar rebate program.

Let’s review all of these Illinois solar incentives:

Illinois Solar Incentive

Benefit for Homeowners

Illinois Solar for All Program

Income-eligible households can get solar panels installed with zero upfront costs, instead paying a reduced fee for the energy produced over time.

Net Metering

Local power companies are required by law to give you full credit for all excess electricity your system generates that’s exported to the grid.

Solar Property Tax Exemption

When you install solar panels in Illinois, the resulting increase in your home value is not taxed.

ComEd Solar Rebate

ComEd pays a rebate of $250 for each kilowatt of solar capacity, and the program is available for nonresidential systems up to 2,000 kW.

Other Local Solar Incentives

Additional solar incentives may be available from your city, county or power company.

Illinois Solar for All Program

The Illinois Solar for All program is in place to make solar panels affordable for income-eligible households. This program is available for households with a gross income under 80% of the area median income, and multifamily buildings also qualify if they meet the following conditions:

  • Multifamily buildings with 2-4 dwellings: At least two dwellings must have occupants below 80% of the area median income.
  • Multifamily buildings with 5 or more dwellings: At least half of the dwellings must have occupants below 80% of the area median income.

Households that qualify for this Illinois solar incentive program will have solar panels installed with no upfront cost, and instead will pay a monthly fee for the power they produce over time. The maximum fee is 50% of the value of the energy produced, which means that clean energy savings are guaranteed for those who qualify.

Net Metering

Having a favorable net metering policy is key for homeowners in Illinois, as the value of the excess electricity produced by their panels can be subtracted from their power bills. For example, if your solar panel system produces 1,000 kWh in a month but you only use 600 kWh to power your home, you can send the remaining 400 kWh back to the central power grid and receive a utility credit worth the retail rate of electricity in your area.

In states without net metering laws that favor solar owners, power companies decide how to manage surplus generation from home solar systems. In many cases, they give a reduced credit, which means you don’t save the full value of each kilowatt-hour, or no credit at all.

In Illinois, net metering at the full kWh price is available for solar power systems up to 40 kW of capacity, which covers the vast majority of home installations. All credits can be rolled over to future electric bills if they aren’t used up each month. The balance is reset once per year, and you can choose between two annual periods: May to April or November to October.

Solar Property Tax Exemption

Illinois offers a property tax exemption for solar power systems, which means you are not taxed for the increase in home value after installing them. For example, if you own a $250,000 home and the assessed value increases to $280,000 with solar panels, you will still be taxed on a value of $250,000.

Unfortunately, solar panels are not exempt from the state’s 6.25% sales tax. However, with all of the other Illinois solar incentives available, this only results in a slight increase in your out-of-pocket cost of solar panels.

ComEd Solar Rebate

ComEd manages the largest Illinois solar rebate program, which is available for three types of customers: commercial consumers, industrial consumers and community solar projects. The rebate is $250 per kilowatt of solar capacity, and the maximum system capacity is 2,000 kW. This means a large solar array can potentially qualify for an incentive of $500,000.

Note that this rebate program is not available for residential systems.

Other Local Incentives

As mentioned above, there may be additional incentives offered by your local government or utility company. Before installing a solar power system, we recommend doing some research about any benefits locally available to you.

Federal Solar Tax Credit

Strictly speaking, there is no Illinois tax credit for solar panels. However, the federal solar tax credit remains available in all states, and you can claim 26% of equipment and installation costs for all systems turned on before the end of 2022. If you miss out, you can still claim a 22% tax credit in 2023. From 2024 onward, unless Congress decides to extend the program, there will only be a 10% tax credit available for solar power systems owned by businesses.

FAQ: Illinois Solar Incentives

Does Illinois have a solar rebate?

Illinois does not have a solar rebate, but its largest utility company, ComEd, offers a rebate of $250 per kilowatt for nonresidential solar. The benefit is available for solar power systems up to 2,000 kW that are owned by commercial and industrial customers, and also for community solar projects.

Solar systems are also available at zero upfront cost for income-eligible households through the Illinois Solar for All program.

Is it worth going solar in Illinois?

In general, it is worth going solar in Illinois. You can claim Solar Renewable Energy Credits, which lead to extra cash flow beyond your power bill savings. There is also a favorable net metering policy in the state, which ensures you are given utility credits for any excess power your system generates.

However, solar might not be right for every household. You can book a free consultation with a qualified solar installer to check whether your home is a good fit and get a no-obligation cost estimate. Fill out the form below to get connected.

Are there any government incentives for solar panels?

Yes, the federal solar tax credit, or investment tax credit (ITC), is the main government incentive for solar panels. This allows you to claim 25% of solar installation and equipment costs as a credit on your federal tax filing. However, in 2023, the value of the credit will be reduced to 22%, and it is currently slated to expire altogether for residential systems in 2024.

How much does ComEd pay for solar?

The ComEd Illinois solar rebate program pays $250 per kilowatt of solar generation capacity. This benefit is available for commercial, industrial and community solar systems up to 2,000 kW.

Leonardo David is an electromechanical engineer, MBA, energy consultant and technical writer. His energy-efficiency and solar consulting experience covers sectors including banking, textile manufacturing, plastics processing, pharmaceutics, education, food processing, fast food, real estate and retail. He has also been writing articles about energy and engineering topics since 2015.

Read More: Illinois Solar Incentives: 2022 Tax Credits & Rebates

2021-12-14 15:00:00

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy
%d bloggers like this: