Harnessing solar energy in Illinois can be a profitable venture! Despite the state’s relatively low electricity prices, Illinois’ plentiful sunshine and solar tax incentives can lead to substantial savings from day one.
The affordability of home solar panels has never been better. When you couple the decreasing prices with the 30% federal solar tax credit and the Illinois Shines incentive program, your solar panel system could quickly pay for itself, continuing to provide low cost power for many years to come.
Opting to go solar as a homeowner in Illinois is a wise investment. Below, we provide a comprehensive overview of the solar power incentives available in Illinois.
On this article, you can:
- Discover the array of solar tax incentives accessible to homeowners in Illinois
- Identify the Illinois solar tax incentives you’re eligible for based on your city and utility company
- Determine how much these incentives and/or Illinois solar tax credits will lessen your costs to go solar and incorporate batteries
U.S. Government Solar Investment Tax Credit for 2024
A substantial factor that reduces the expenses of going solar in Illinois is the U.S. Federal Solar Investment Tax Credit (ITC).
Should you decide to install your photovoltaic system before the conclusion of 2032, the ITC allows you to deduct 30% of the cost of your solar panel system from your federal taxes. This deduction is applicable to the entire cost of the system that includes equipment, labor, and permitting fees.
For instance, if the overall cost of your solar energy system is $20,000, the federal solar tax credit you would be eligible for would be $20,000 x 30% = $6,000.
However, starting from 2033, the federal tax credit will decrease to 26%.
Understanding Net Metering in Illinois
Net metering is a boon for solar energy consumers in many states, offering them full retail rate credit for the electricity their solar panels feed back into the grid.
Under Illinois law, utilities are mandated to monitor your renewable energy generation and consumption each billing cycle when net metering is in effect. Surplus energy is then converted into a credit that rolls over to your upcoming bills. The only exception to this provision is if your electricity comes from a municipal or cooperative corporation.
While Illinois’ net metering policy is quite favorable, it is not without its limitations. Accumulated credits do not carry over indefinitely but rather expire at the end of each annual period, reverting back to the utility without any compensation. This means it’s crucial to size your solar system appropriately to avoid generating more electricity in a year than you consume.
The good news is that customers have the flexibility to select an annual period ending on the last day of either their April or October billing period, allowing them to maximize their credit usage.
To get custom savings estimates tailored for your needs, reach out to Windfree Solar.
Solar Incentives in Illinois
While the state of Illinois does not provide direct monetary rebates for the installation of solar panels, it does offer an impressive solar initiative called “Illinois Shines.” This program compensates solar system installers with a one-time payment, calculated based on the predicted energy output of the installed systems over their lifespan. This makes pursuing solar energy in Illinois a highly attractive proposition.
Understanding the Illinois Shines adjustable block grant program
The Illinois Shines Program offers a significant financial advantage for those considering solar energy. This initiative provides upfront payments in exchange for the Solar Renewable Energy Credits (SRECs) that your solar system is projected to produce over its initial 15 years.
To benefit from the program, you need to enter into a contract with an Approved Vendor, typically your solar installer. The vendor will then either deduct the SREC value from the upfront cost of your solar system or pay you once the program compensates the vendor.
SREC values are determined based on your geographic location and utility group.
- For Group A customers, which include those served by Ameren Illinois, MidAmerican, Mt. Carmel Public Utility, or rural electric cooperatives and municipal utilities located in the Midcontinent Independent System Operator (MISO) territory, the SREC values are $78.51 for systems up to 10 kW and $66.39 for systems between 10 and 25 kW.
- For Group B customers, which include those served by ComEd or rural electric cooperatives and municipal utilities located in the Pennsylvania, New Jersey, and Maryland Interconnection (PJM) territory, the SREC values are $82.22 for systems up to 10 kW and $71.89 for systems between 10 and 25 kW.
Payment Projections
Consider an average solar system in Illinois, with a capacity of 6.4 kW. It’s estimated that over 15 years, this system will produce about 122 Solar Renewable Energy Credits (SRECs). If the system is installed in the ComEd service area, each SREC could earn an average of $82.22, leading to a total program payment of roughly $10,030.84. This amount offsets more than half of the system’s projected installation cost of $19,200.
Should the same 6.4 kW solar system be installed in the Ameren service area, each SREC would fetch $78.51. This equates to a total program payment of approximately $9,578.22.
Favorable Property Tax Considerations
In Illinois, a unique property tax incentive is in place to promote the use of solar energy. By registering your solar system with the chief county assessment officer, the value attributed to your solar equipment will be capped at the value that would be assigned to a traditional energy system. While this is not as straightforward as the 100% property tax exemption seen in many states, it still represents a valuable saving opportunity. Remember, every dollar saved contributes to your overall financial benefits from choosing solar energy.
Sample solar prices in Cook county:
| Â | Â |
| Cost range of local prices | $18,040-$22,049 |
| Payback period | 10.4-12.7 years |
| Net profit (savings less system cost) | $30,525-$37,309 |
| Average size system installed in IL in 2024 | 10.8kW |
For more detailed insights and personalized guidance on how solar energy can benefit you in Illinois, please feel free to contact our team. Our experts at Windfree Solar are more than happy to help you navigate the world of solar incentives, tax credits, and more. Let’s work together towards a brighter, sustainable future.
