2022 Illinois Solar Incentives Guide (Tax Credits, Rebates & More)
In this EcoWatch guide on the solar incentives in Illinois, you’ll learn:
- What the Illinois Shines program is
- How Illinoisans can profit off of the solar energy they produce
- How the Illinois Solar for All program can assist low-income households
This guide has helped thousands of homeowners in the Prairie State save time and money when going solar. Let’s get started!
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Our solar experts have sifted through hundreds of local governments’ and utility companies’ websites to find accurate information about current solar incentives in each state. We’ve also unbiasedly ranked and reviewed hundreds of solar installers to empower you to make the right choice for your home.
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What Should You Know About Illinois’ Solar Market?
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.1
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.
What Solar Incentives Are Available in Illinois?
New Jersey residents have access to low-cost solar panels, a favorable net metering policy and solar tax incentives. 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|
|Federal Solar Tax Credit (ITC)||The credit is worth 30% of the total cost of solar panel systems that are purchased through 2032. |
It will drop to 26% in 2033 and 22% in 2034. It will be phased out by 2035 unless it is renewed by Congress.
|Illinois Shines Program||Homeowners can receive energy credits (SRECs) for their solar energy production, which can be sold to their electricity provider to reduce their energy costs.|
|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 Program||Local power companies are required by law to give you full credit for all excess electricity your solar energy 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 Shines Program
Illinois is one of the few states with a Solar Renewable Energy Credit (SREC) program, which is officially called Illinois Shines (you may also hear it referred to as the Adjustable Block Program).
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 energy 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 price of SRECs is determined by the Illinois Power Agency.
The Illinois Shines SREC program opened on January 30, 2019. This state incentive 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.
Watch Below: learn more about Renewable Energy Credits (RECs)
Illinois Solar for All Program
The Illinois Solar for All program (ILSFA) 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.
This community solar program’s approved vendors are not allowed to charge any upfront costs when installing solar panels for qualifying homes; instead, those households 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.2
Illinois 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.3
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.
Commonwealth Edison (ComEd), Ameren Illinois Utilities and MidAmerican Energy Company are a few of the main utility providers in Illinois that offer net metering programs.
Solar Property Tax Exemption in Illinois
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.4
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.
What Do Illinois Homeowners Need to Know About the Federal Solar Investment Tax Credit (ITC)?
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 30% of equipment and installation costs for all systems turned on before the end of 2032.
The tax credit will decrease to 26% in 2033 and 22% in 2034. The benefit will expire in 2035 if Congress does not renew it.
Check out our article here for more info on the government-provided tax credit for solar energy.
Related Illinois Solar Resources
FAQs: Illinois Solar Programs
At EcoWatch, we’re happy to get questions about the process and costs of getting rooftop solar from Illinois residents. Below are some of the questions we see most often, along with our responses. If you have specific questions that aren’t answered here, reach out to our team of solar experts at email@example.com.
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.
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.
Yes, the federal solar tax credit, or investment tax credit (ITC), is the main government incentive for solar panels. This allows you to claim 30% of solar installation and equipment costs as a credit on your federal tax filing. The value of the credit will be reduced to 26% in 2033 and 22% in 2034, with the benefit expiring in 2035.
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.