Chicago Solar Incentives, Tax Credits & Other Rebates [2022 Updated]

In this EcoWatch guide on the solar incentives in Chicago, you’ll learn:

  • Specific solar credits for Chicago residents and business owners
  • About the federal solar Investment Tax Credit (ITC) for Chicago residents
  • Net metering policies in Chicago
  • And the additional city and federal rebates available to locals

This guide has helped thousands of Chicago homeowners save time and money when going solar by providing them with all of the latest incentives available in the area. Let’s get started!

Ecowatch Author Dan Simms

By Dan Simms, Solar Expert

Updated 9/19/2022

Why You Can Trust EcoWatch

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. 

Jump to Section:

  1. How Much Can You Save With Solar Incentives in Chicago?
  2. What Incentives or Solar Tax Programs Are Offered in Chicago for Homeowners?
  3. How Can Homeowners Redeem Solar Incentives In Chicago?
  4. What Incentives or Solar Tax Programs Are Offered in Chicago for Businesses?
  5.  How Can Business Owners Redeem Solar Incentives in Chicago?
  6. FAQs: Chicago Solar Incentives

Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal, or tax advice.

If you’re ready to connect with a qualified professional, follow the links below. Each of these companies can help you identify, apply and benefit from the incentives available in Windy City.

Best National Provider
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SunPower

  • Pros icon Most efficient panels on the market
  • Pros icon National coverage
  • Pros icon Cradle to Cradle sustainability certification
  • Pros icon Great warranty coverage
  • Con icon Expensive
  • Con icon Customer service varies by local dealer

Services Offered

  • Service icon Solar Panels
  • Service icon Solar Batteries
  • Service icon EV Chargers
  • Service icon System Monitoring
Best Warranty Coverage
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ADT Solar

  • Pros icon Industry-leading warranty coverage
  • Pros icon Expansive service area
  • Con icon Some reported communication issues
  • Con icon No leases or PPAs

Services Offered

  • Service icon Solar Panels
  • Service icon Solar Batteries
  • Service icon EV Chargers
  • Service icon Energy-Efficiency Upgrades
Outstanding Regional Installer
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Regional Service

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$$$$$

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Sun Badger Solar

  • Pros icon Offers products from leading manufacturers
  • Pros icon Competitive pricing
  • Pros icon Offers rewards for customer referrals
  • Con icon No leases or PPAs
  • Con icon Relatively young company

Services Offered

  • Service icon Solar Panels
  • Service icon Solar Batteries
  • Service icon EV Chargers
  • Service icon Maintenance & Repairs

How Much Can You Save With Solar Incentives in Chicago?

On average, the rebates and solar incentive programs available in Chicago will save residents over $6,000 and business owners around $7,500. This doesn’t take into consideration the energy savings that you’ll enjoy as you use your solar panels to offset electricity bills.

The amount of the rebates/solar incentives are calculated as follows:

  • The federal tax credit is for 30% of your total system cost for your residence. Since the average system cost in Chicago is $20,475, the credit will be for an average of $6,142.
  • The property tax exemption saves you around 1% of your solar system’s value each year because it isn’t assessed as part of your property value in Chicago. That means an average of $205 off what your property taxes would otherwise be annual.
  • Chicago recently reworked its permitting process and fees to save solar customers around $100 on permits.
  • Chicago business owners can also take the Commonwealth Edison Solar Rebate, which averages out to $1,750 in rebates.

We’ll explain where these savings come from and some specifics about the savings — including those from federal and state incentives — later in this article.

What Incentives or Solar Tax Programs Are Offered in Chicago for Homeowners?

In the table below, we’ll include an easy-to-read breakdown of all of the solar incentives available for residential solar systems in Chicago. We’ll include additional information about each of these incentives in the sections below the table as well.

Chicago Solar Rebate/Incentives Description
Federal Solar Investment Tax Credit (ITC) This federal incentive provides credit to your income taxes for 30% of your system total.
Net Metering Net metering lets you apply the value of extra energy production from your panels to future charges to reduce your electric bills.1
Solar Property Tax Exemption This exemption excludes the value of your installed solar system from your property value for tax assessment purposes, so you won’t be taxed on the value of your solar system. The state’s assessment system will still show the value of your property including the value of your solar system, you just won’t be taxed on it.2
Illinois Solar for All Program This nonprofit program helps bring solar to low-income homes by reducing upfront and ongoing costs.3
Chicago Solar Express Chicago recently revamped its permitting and inspection process, reducing the permit fee by $100 and shortening timelines.4
Solar Renewable Energy Credits (SRECs) Illinois Shines recently reinstated awards to solar customers for producing clean energy. This is done via energy credits, which can be sold for profit.5

 

Federal Solar Investment Tax Credit (ITC)

The ITC is a federal solar tax incentive that credits your federal income taxes with 30% of your total system cost. This is the most substantial incentive available in Chicago, and it’s offered to all residents.

Given the average system size of 7.5 kW and the average cost per watt of $2.73 in Chicago — for a total system cost of $20,475 — that means residents will get a credit of $6,142, on average.

It’s important to keep in mind that you’ll only get the maximum benefit from the ITC if your income taxes owed are greater than 30% of your total system cost. If not, you could lose out on some of the credit.

However, the federal government currently lets solar customers roll over their credit to the following tax year. Keep this in mind if you don’t get the entire credit the year your system is installed.

Net Metering Policy in Chicago

Net metering is a statewide policy in Illinois that lets solar customers of all investor-owned utilities (IOUs) produce more energy than they need and use it in the future. It can be used to pay down bills in months where production is low, or energy consumption is high — like in the cold Chicago winters.

Most Chicago residents — residential property owners and business owners — will have access to net metering. However, net metering is only a requirement for IOUs according to the Illinois Citizens Utilities Board, so you’ll only be guaranteed access if you’re a customer of Commonwealth Edison, MidAmerican, or Ameren.6

Chicago-meterCredit: Renee Goudet / Pixabay

Although we didn’t include the potential energy savings net metering can provide in the short analysis above, the energy savings can be some of the most substantial in the energy industry. Over the average lifespan of your solar panels, net metering can help you significantly reduce your energy costs.

Solar Property Tax Exemption in Chicago

This incentive prevents your property taxes from going up as a result of installing solar on your home. When you install solar, the value of your home increases. The solar property tax exemption excludes the value of the solar improvement for tax assessment purposes. With an average home value in Chicago of around $320,000 and a tax rate of 8%, residents stand to save around $250 per year on property taxes.7, 8

In the analysis above, we’ve used a single year of savings for ease of numbers. However, since your solar panels will maintain their value for many years and the exemption lasts for eight years, you’ll really save closer to $2,000 over the life of your solar energy system.

Illinois Solar for All Program Available in Chicago

While there is no specific dollar amount you can save with this program, you could get panels installed on your home with $0 down if you qualify. Rather than paying monthly for your system, you’ll enjoy the below benefits:

  • Easy access to renewable energy
  • An affordable way to support the solar industry
  • Reduced energy bills
  • Reduced reliance on fossil fuels

The Illinois Solar for All Program is a great way for low-income households to contribute to the clean energy movement and potentially enjoy lower energy bills every month.

Chicago Solar Express

In 2013, Chicago made an effort to make applying for and paying for permits easier and more affordable. Permit fees were reduced by $100, and the city is more open and helpful regarding the permitting process, even cutting the permit approval process to one day once preliminary steps have been completed.9

This doesn’t affect your total cost of going solar too much, but the savings are a nice bonus and getting the permit expedited is helpful.

Solar Renewable Energy Credits (SRECs) in Chicago

Finally, Chicago residents can earn Solar Renewable Energy Credits (SRECs) — also called RECs — which are energy credits accrued for every kilowatt-hour of energy you produce. SRECs can be sold in Chicago for around $71 each.10

With the average solar panel system in Illinois coming in at around 7.5 kilowatts, the typical annual production will be around 7,500 watts or 7.5 kilowatt-hours.

Assuming the price of the SRECs doesn’t change, yours can net you an average of $532.50 each year. Over the 20-year expected lifespan of your panels, this could equal a total of $14,910.

The profit you enjoy from SRECs can be used to pay down your solar loan if you have one, which could also save you money on interest.

SRECs are sold in “blocks” that fill up as more residents convert to solar. The SREC program was closed in 2020 due to Illinois reaching maximum capacity for its blocks.

However, it reopened in 2021 when the Climate and Equitable Jobs Act (CEJA) was passed, partially in response to the Future Energy Jobs Act (FEJA). This also improved the state’s Renewable Portfolio Standard (RPS).

How Can Homeowners Redeem Solar Incentives In Chicago?

Taking advantage of the solar incentives listed above is relatively straightforward, but the process is based on each individual incentive. We’ll include some information and tips on how to proceed below.

How Do Chicagoans Claim the Solar Tax Credit?

Your solar contractor should provide you with the documentation you need to get the ITC. The documentation typically includes the installation site, system schematics, the size of the system, your information and the total price paid for your equipment.

When it’s time to file your taxes, you or your accountant will need to file federal tax form 5695 along with your taxes to get the credit.

Applying for Chicago’s Net Metering Programs

You’ll be automatically opted in to net metering when you go solar and connect to the electrical grid in Chicago. Your utility provider will track your production and usage and credit you accordingly.

Depending on your solar installer and utility company, one or both of them might provide you with updates as to how much overproduction you have and how much is being allocated to your utility bills each month.

For Chicago residents who are customers of the IOUs mentioned above, a one-to-one rate is used to credit your account for overproduction. That means every kilowatt-hour you produce will be paid the full retail value for one kilowatt-hour. 

Chicago-dollarCredit: Devonyu / iStock Photo

It’s worth mentioning that all net metering credits expire each year, so you’ll get the most bang for your buck by sizing your system appropriately for your home. You can reach out to a reputable solar installer in Chicago for help with this.

Solar Property Tax Exemption Filing

Filing for the solar property tax exemption involves filling out the PTAX-330 form and filing it with the Cook County Assessor’s office.11 There are no fees associated with filing the form.

The exemption information should appear on the following tax bill you receive.

Illinois Solar for All Program Application Process

Applying for the Illinois Solar for All Program begins with having your income confirmed by the program administrator. In Cook County, the maximum approved income for a single-family home is $44,250.12 You will then need to progress through the steps for getting a solar energy system installed on your home, including:

  • Speak with the program administrator for further verification
  • Get paired up with a local Solar for All-approved installer
  • Work with your installer to create a plan for converting your home
  • Your vendor will either work to install solar or will connect you with a community solar project to confirm eligibility
  • Your vendor will submit the required paperwork to the Solar for All program administrator, who will then take care of upfront payment, if necessary, or future payments in the case of community solar

Chicago Solar Express Application Process

The Chicago Solar Express program just makes the permitting and inspection process easier. There are no specific requirements to take advantage of this program.

All business and home solar power systems in Chicago must be permitted. Chicago also mandates a post-installation system inspection by a licensed electrician that is certified by the city.

The permitting process is the same, although the Chicago Solar Express program made solar permits more affordable. Scheduling the inspection was also streamlined.

Getting Solar Renewable Energy Credits (SRECs) in Chicago

The Adjustable Block Incentive (ABI) set forth by Illinois Shines means your SRECs will accrue automatically, so you don’t need to submit any specific paperwork. You can coordinate with your solar installer as to which entity — they’re called “approved vendors” by the Illinois Power Agency (IPA) — you want to sell your credits to prior to installation.

These SRECs will automatically be sold according to the contract you sign with your approved vendor. While the average rate for SRECs in Chicago in 2021 was $71, the cost will gradually decrease, so going solar sooner is more beneficial.

What Incentives or Solar Tax Programs Are Offered in Chicago for Businesses?

Most of the solar incentives for residents in Chicago also apply to business owners, so the process for commercial solar customers will be the same as described above. The primary difference is that the ITC for business is 30% of the system total in 2022.

We looked into additional benefits and incentives available to business owners in Chicago. As of this writing, there is just one additional rebate offered by Commonwealth Edison (ComEd) that is exclusive to business owners.

ComEd Solar Rebate

The Commonwealth Edison solar rebate provides a rebate of $250 for every kilowatt you install on your place of business. This solar program is good for all systems up to 2,000 kilowatts, which means the large majority of commercial systems will qualify for the entire amount.

How Can Business Owners Redeem the ComEd Rebate in Chicago?

Applying for the Commonwealth Edison rebate is a simple process. You can follow the steps below to take advantage of this rebate: 

  • Go to the company’s website
  • Check for eligibility based on business ownership, utility provider, and location
  • Fill out the application form to apply
  • You’ll get a response and the rebate within 30 days of the application being submitted

FAQ: Chicago Solar Incentives

In the sections below, we’ll answer some of the most commonly asked questions we see about Illinois solar incentives specifically for Chicago.

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Dan Simms

Solar Expert

Dan Simms is an experienced writer with a passion for renewable energy. As a solar and EV advocate, much of his work has focused on the potential of solar power and deregulated energy, but he also writes on related topics, like real estate and economics. In his free time — when he's not checking his own home's solar production — he enjoys outdoor activities like hiking, mountain biking, skiing and rock climbing.