Solar Panel Cost in Illinois (2023 Local Savings Guide)
By Dan Simms /
In this guide to solar benefits and incentive programs available in Illinois, you’ll learn:
Absolutely! The solar perks in Illinois can collectively bring the cost of solar conversion down by thousands of dollars, making going solar far more accessible and affordable to residents in the state.
The average cost of photovoltaic (PV) panels in Illinois is around $20,475 before any incentives or rebates are applied. Although this is around 10% lower than the national average of $23,940, it’s still a massive price tag to convert to renewable energy and one that many Illinois property owners cannot afford.
The good news is that Illinois is home to quite a few incentive programs that make PV equipment more affordable and maximize your long-term solar savings. In fact, Illinois has better incentives than most other states. These serve to help the state reach its Renewable Portfolio Standard (RPS) goal of producing 25% of its energy via clean sources by 2026.1
In the chart below, we’ll include a breakdown of all of the incentives and rebates you can take advantage of as a solar customer in Illinois. We’ll also include the average savings afforded by each perk to help you prioritize which to take.
|Solar Benefit in Illinois||Incentive Type||Description||Occurrence||Estimated Dollar Amount You Can Receive|
|Federal Solar Investment Tax Credit (ITC)||Federal||Offers a credit to your tax liability for 30% of your entire system cost||One-time: Gets applied to your tax bill when you file your taxes for the year you install your system||$6,143 on average in Illinois|
|Illinois Shines Program||State||Provides credits for all solar production, which you can sell for a profit||Ongoing: You will continue to earn credits for all production over the first 15 years of system ownership||Varies based on the size of your system, your total energy production rate and more|
|Illinois Solar for All Program||State||Offers an accessible payment plan for low-income solar customers||One-time: Goes into effect when you register for the program and install a solar electric system||Varies based on the size of your system, your average monthly electric bill and more|
|Solar Property Tax Exemption||State||Waives all taxes on your property for the value added to your home by your PV system||Ongoing: Prevents your property taxes from increasing due to the bump in real estate value for as long as your system operates||Varies based on your system size, system installation cost and your local property tax rate|
|Illinois Net Metering||Local||Provides credits for excess energy production, which can be used to pay down future bills||Ongoing: This perk is always in effect, so you’ll consistently get credited for excess power you send to the electric grid||Varies based on your monthly utility bills and your average rate of solar production|
|Local Incentives||Local||Various rebate programs offered by local utility companies and municipalities||One-time: These perks are available as one-time benefits when you purchase your home solar system||Varies based on the specific incentive, where you live and your utility provider|
The federal solar investment tax credit (ITC) is, in our opinion, the most appealing incentive available in Illinois. It’s offered by the federal government, and it provides a massive credit to your income tax burden in the amount of 30% of your total system value.
That system value is calculated using the cost of your panels, batteries and inverters, plus installation costs. In Illinois, the credit averages out to $6,143.
This credit has been available since 2005, and it has gone through some changes since it was initially offered. At first, the credit amount was set to decrease based on the below schedule:
In August of 2022, the federal government re-upped the credit amount and pushed back the expiration date of the program. The new guidelines are as follows:
Claiming the federal tax credit in Illinois couldn’t be much easier. You can follow the steps below to ensure you get access to this outstanding benefit program.
It’s worth mentioning that tax software like HR Block and TurboTax know about this incentive and typically ask you when you go to file if you installed renewable energy equipment. If you answer “yes,” the software will automatically direct you to fill in the required information.
In our opinion, the federal credit is the best and most valuable incentive available in Illinois. If you only have time to file for one credit, we strongly suggest making it this one. It provides an average potential value of $6,143 for Illinois residents, and it takes just a few minutes to file for.
It’s important to note that this is not a cashback incentive, so you won’t get the average credit value of $6,143 back. Instead, the total credit amount is applied to the income taxes you owe, which means you can only take the credit if you owe money on your taxes.
You can, however, take a partial credit the first year and roll over any leftover credit for up to five years. Provided you expect to owe around $1,200 or more each year in taxes for the next five years, you should be able to take the entire credit or close to it.
Still, we think this is an outstanding solar perk and well worth the time it takes to apply.
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The Illinois Shines program is the state’s equivalent of the Solar Renewable Energy Credit (SREC) programs and adjustable block programs in other states. It credits all solar customers for solar production, and those energy credits can then be sold for a profit.
Through the program, you earn one credit for every 1,000 kWh (1 megawatt-hour) your system generates, which most IL property owners generate in a single month. The state has a local SREC market where your credits can be sold. Utility companies that need to meet the state’s RPS goals buy them to remain in compliance.
The price per REC in Illinois is governed by the Illinois Power Agency. As of the time of writing, each SREC in IL is worth approximately $72. With one credit earned each month, that’s an average of $840 per year your system will earn you. We recommend using the money earned via your credits to:
Selling your SRECs on the local market is easier to do than you might think, as it’s automatic for most homeowners. We’ll discuss the steps you need to take below to ensure you get full credit for your SRECs.
We’re big fans of SREC programs because they credit you for all of your solar production, regardless of what you do with the energy. Whether it’s ported to the grid or used in your home, you’ll earn a cash value for all of the energy you generate. For the average Illinois resident, this solar program yields around $12,600 over the life of their system!
Best of all, the program takes no time to enroll in, as your installer will set up automatic credit sales for you. As such, taking advantage of this is a no-brainer.
The Illinois Solar for All (ILSFA) Program is an excellent option for low-income households to convert to solar power. It allows residents with household incomes below 80% of the median to get PV panels installed for no upfront costs.
The program is made possible via the REC market in Illinois. ILSFA-approved vendors are paid via the sales of the system’s RECs. The homeowner, in turn, enjoys solar panels and the energy that they generate at a low cost. This is an outstanding program for those who qualify and cannot afford to convert to solar using other payment methods.
Assuming you have an average system installed and typical energy bills for the area — around $93.98 — and your panels generate enough to offset 50% of your bill, this program could save you an average of $11,277 over the first 20 years of the panels’ lifespan.
Enrolling in this program is far more complicated than the other incentives discussed above. We’ll break down the initial steps below.
The ILSFA program is an outstanding option for aspiring solar customers who cannot pay for their systems in cash or qualify for a loan or lease.
While it’s an excellent opportunity for some Illinoisans to support the clean energy movement without laying out a ton of money, it’s not the most beneficial way to get solar. You’ll see far less personal benefit than if you purchased or financed panels. Still, we love programs like this because it makes renewable energy far more accessible.
The tax exemption for solar equipment in IL prevents your taxes from going up as a result of installing solar equipment. In most cases, home improvements that make your home more valuable also push your taxes higher since your taxes are based on your overall home value.
The tax exemption prevents the value of your solar panel system from contributing to your tax-assessed value. That means your taxes won’t increase just because you convert to solar energy.
Given the tax rate in IL of 2.16% and the typical system value of $20,475, this exemption should save you approximately $8,845 in taxes over the life of your equipment.2
The tax exemption is another automatic state incentive, so you don’t have to take any action to claim it. Your local tax assessor will simply not include the value of your solar power system when determining your tax-assessed value.
Since this exemption requires no action on your part and will save you a few thousand dollars over the life of your system, we think this is an outstanding solar benefit program. You don’t need to apply for anything or file any paperwork, and the savings are massive.
Net metering, also called net energy metering (NEM), is a billing policy that is mandated in many states by the local Public Utilities Commission (PUC). It guarantees that you are credited for all excess power your system produces that isn’t used in your home and is instead sent to the grid.
All utility companies in Illinois are required to participate, including Ameren and ComEd.
Net energy metering makes it far more likely for residents to offset their utility bills entirely, helping to maximize their energy savings and reduce the amount of time it takes to pay off their equipment.
Illinois has a very favorable net metering program that helps bring down effective energy costs. All excess energy is credited at the full retail rate, which is the best-case scenario.
That means that every kilowatt-hour (kWh) you generate and send to the grid will offset one kWh you pull from the grid when your panels fail to produce enough energy for your home — like at night or on cloudy days.
The credits you accrue roll over for an entire year, and you can choose from two different billing periods for your credits to get reset to zero annually.
It’s important to note that while the net energy metering program in IL is currently outstanding, these policies change all the time across the country. It’s possible that the future holds a less appealing avoided-cost rate for excess energy in Illinois or no compensation at all.
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Enrolling in net energy metering is, thankfully, a simple and straightforward process. We’ll outline the steps you need to take below.
Across the country, NEM is one of the most beneficial incentives available for solar customers. It helps pay off your system more quickly and maximizes your long-term energy savings.
The net energy metering program in Illinois is outstanding, even compared to similar programs in other states. The PUC mandates that all excess energy be credited at the full retail rate, which gives you the best chance of eliminating your utility bills.
Lastly, net energy metering doesn’t cost you anything to apply for, and it takes virtually no time investment either. All credits are automatic, provided you have the right electric meter, and a new one will be provided for free even if you don’t have a bidirectional meter.
In addition to the federal and statewide solar perks mentioned above, there are two other local incentives that might be available to you, depending on where you live. We’ll list these incentives below and provide a brief explanation as to how they work.
Above, we’ve discussed all of the incentives available to Illinois property owners. However, not all of these programs are equally as beneficial, especially when you consider the time investment required to take advantage of them.
Below, we’ll rank what we believe are the top three most crucial incentives to make sure you take as an Illinois solar customer.
As we mentioned above, the federal credit is the best solar perk available in IL, in our opinion. It takes just a few minutes to apply for when you’re filing your taxes, and it provides an average value of over $6,000 in the Prairie State, provided you have a tax liability that allows you to take the full credit.
This credit is also available to all Illinois property owners, and it’s guaranteed to be offered until 2034. Just keep in mind that the credit rate will drop in 2032.
Net energy metering is the second-best perk available to Illinois homeowners, in our opinion. This incentive also takes basically no time to apply for, as you’ll be opted in automatically by your electric company.
Currently, the full retail rate for net energy metering in Illinois means the program will help reduce your panel payback period, maximize your long-term savings and help reduce your monthly electricity bills for the entire time your system produces electricity.
The program could get less beneficial in the future as it is in some other states, but right now, this is our pick for the second most crucial benefit program to take advantage of in Illinois.
Lastly, we believe the SREC program in IL is a staple of the incentive spread available to you and one that you should definitely take part in.
Enrolling in this program is automatic, provided you choose a reputable installer to handle your PV panel installation. Over the 15 years the program lasts, you’re expected to earn around $12,600 for your solar production. This is a massive amount of money to put toward your system costs for minimal effort on your part.
The SREC program in Illinois — called the IL Solar Shines Program — credits you for all solar power you produce with your system. As mentioned above, every 1,000 kWh you generate will yield an energy credit, which will get sold automatically on the local market.
The program lasts for 15 years after you install your photovoltaic (PV) equipment. At that time, you’ll be paid a lump sum for all of the credits you accrued. Some electric companies pay out two lump sums — one at seven years and one at 15 years.
Yes, SRECs are considered taxable income, so you will need to pay taxes on these. This technically won’t cost you anything since you can take the taxes out of the lump sum payment you get. Still, you should plan to include the SREC value in your income and to pay taxes on them.
As of right now, there are no near-term changes to incentives in Illinois planned, which is good news for solar customers.
We should note that the federal solar tax credit rate is scheduled to drop over the next ten years, according to the schedule below:
Following 2034, the program will no longer be available.
We should also mention that the beneficial NEM program is subject to change, as it has in some other states across the country. It’s possible that, as the Prairie State approaches or surpasses its RPS goal, the net energy metering credit rate will drop or go away entirely.
Right now, there are no plans to make the net energy metering program less beneficial, but things could change without notice at any time.
In the sections below, we’ll provide responses to some of the most common questions we get asked about solar perks and benefit programs in Illinois.
As of right now, there are no plans or pieces of legislation in the works to increase incentives in Illinois. The perks available are plentiful and highly beneficial, and the state is currently on track to meet its RPS goal. It’s our hope that when the goal is met in 2025, the state sets a new one and maintains the current incentives to help reach it.
The Inflation Reduction Act (IRA) is the piece of legislation that extended the federal credit and bumped up the credit rate. As a result, the federal credit is back up to 30% and got extended for ten years to 2034. The rate will drop in 2033, but solar customers were given an additional decade to take advantage of the credit.
Additionally, the IRA provides increased credits for purchasing electric vehicles. The credit was bumped up to $7,500 for some makes and models. These credits work similarly to the federal solar tax credit.
No, there are currently no plans for incentives to become less beneficial in Illinois in the next two years. It’s possible that in 2025 when the state reaches its RPS goal, some incentives will be abandoned or changed for the worse.
If that does happen, and the state doesn’t set a new RPS goal, the likelihood is that net energy metering will either no longer be available or will drop to a less beneficial avoided-cost rate. That would mean less credit for each kWh you pass to the grid, which translates to fewer long-term savings.
Additionally, the Illinois Shines Program has been a bit rocky in the past. It was discontinued in 2021, but then reinstated by the Climate and Equitable Jobs Act that same year. It’s possible that this incentive will be discontinued again if funds run out.
Unfortunately, Illinois doesn’t waive sales tax on PV equipment. This is a perk that helps keep down the upfront cost of solar systems to make them a bit more accessible, so it would be a great addition to Illinois’s collection of benefit programs. However, we don’t expect this to appear in the near future.
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