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December 31, 2023

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    Solar prices in the state of Illinois are slightly above average on a cost-per-watt basis, but the total cost is more affordable than the national average. When you consider the money you can save by enrolling in Illinois’ outstanding solar incentive programs, things get even better. Statewide programs like Illinois Shines boost your yearly savings, and the state’s net metering policy is one of the best in the country.

    I explain how to get the most out of Illinois’ excellent solar incentive programs in this article. I cover what each program does, how to determine what programs you qualify for, and how to decide whether each incentive is worth the effort it takes to enroll.

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    How Does Illinois Rank for Solar Incentives?

    Illinois has a suite of solar incentives that make going solar in the state much more affordable than it otherwise would be. The state doesn’t have as many solar incentives as other states, but it has more than enough programs and rebates to help its residents switch to renewable energy without breaking the back.

    The average cost per watt for solar in Illinois is $2.73, which is above the national average of $2.66. That means that taking advantage of as many solar programs as possible is essential to keep costs down. The good news is that Illinoisans use less energy than people from most other states, so the overall cost of going solar in Illinois is a bit below the national average.

    The following table summarizes the state-level solar financial incentives available to residents of Illinois. I’ll discuss each in more detail in the sections below.

    Solar Incentives Available in IllinoisWhat Is It?When Can You Get It?How Much Can It Save You?
    Federal Solar Investment Tax Credit (ITC)
    Credits 30% of your entire system price to your income tax burden


    One time: Gets applied when you file your taxes after installation
    $6,143 via tax credits on average in Illinois
    Illinois Shines ProgramA program that pays you based on how much your system producesOngoing: You earn credits that you can sell for the first 15 yearsVaries, but comes out to around $900 per year, on average
    Illinois Solar for All ProgramAn affordable financing plan for low-income residential customersOne time: It only applies when you purchase your systemVaries depending on the system you have installed
    Property Tax ExemptionA property tax exemption for residential solar customersOngoing: It affects your property tax rate for the life of your systemVaries depending on the system you have installed and your property tax rate
    Local IncentivesTax incentives and rebates offered by utility companies and local governmentsVaries by programVaries by program
    Net MeteringAllows you to earn energy credits for all overproduction and offset future utility billsOngoing: Always in effectVaries based on system size, energy needs, and credit rate

    Featured Video: Is Going Solar Worth It?


    Federal Solar Tax Credit (ITC) – How It Impacts Illinois Residents

    My Take: The ITC is one of the most beneficial solar perks in the country. Not only is it available to all taxpayers, but it can bring down your system costs by an incredible 30%. Plus, it’s super easy to apply for.

    The federal solar tax benefits lets you claim 30% of the total cost of your solar power system as a credit you can use to offset your tax liability.

    The federal ITC is the largest solar tax credit available to Illinois residents, allowing them to claim 30% of the cost of their rooftop solar installation as a tax credit. An average 7.5 kilowatt (kW) system costs $20,475 in Illinois. That means the average Illinois homeowner installing solar can save $6,143 by claiming the federal ITC.

    While claiming the federal ITC makes sense in every state, it’s especially beneficial in Illinois, where the cost per watt of solar is higher than the national average.

    If you’re considering going solar, you have some time before the federal ITC runs out, but you should know it won’t last forever. The program has already been extended once, but it is unlikely to be extended again. Here are the details of the current plan to phase out the ITC by 2034:

    • 30% of your total system value for solar photovoltaic (PV) systems installed before 1/1/2033.
    • 26% of your total system value for solar PV systems installed after 12/31/2032 and before 1/1/2034.
    • 22% of your total system value for solar PV systems installed after 12/31/2033 and before 1/1/2035.
    • ITC discontinued for systems installed after 12/31/2034.

    Steps to Claim the Federal Solar Tax Credit in Illinois

    The federal government makes it easy to claim the ITC, but I still recommend consulting a certified public accountant (CPA) to ensure you file your tax return correctly to receive the credit.

    Here are the steps you need to take to claim the ITC:

    1. Download form 5695 from the IRS website.
    2. Fill out part 1 of the form to calculate your tax credit. Solar systems go under “qualified solar electric property costs.” Your system’s cost goes in line 1, and calculations 6a and 6b determine the credit you receive.
    3. Skip to line 13 unless you made other qualifying renewable energy additions to your home this year or have rollover credit from previous years.
    4. Use the Residential Energy Efficient Property Credit Limit Worksheet found here to calculate your tax liability limitations.
    5. Complete the calculations on lines 15 and 16.
    6. Include the tax credit you calculated on line 15 on line 5 of your 1040 when you file your tax return for the year.

    One thing worth mentioning is that the ITC is a tax credit, not a tax rebate. That means it can only save you money if you owe taxes for the year.

    illinois solar rebates and tax credits

    Which Solar Incentives Are Offered at the State Level in Illinois?

    Illinois also has several state incentive programs you can use with the federal ITC to reduce the cost of going solar. These state-level incentives are available to all qualifying customers in the state. I’ll cover more fine-grained local programs in the next section.

    Illinois Shines Program

    My Take: In my opinion, SRECs aren’t that beneficial. Your ability to sell them — and the average SREC value — depends on supply and demand, and supply has been increasing a lot as solar becomes more popular.

    The Illinois Shines program — also called the Adjustable Block Program — is a credit program run by the Illinois Power Agency (IPA). You earn one credit for every megawatt-hour (MWh) your system generates. The average Illinois rooftop solar system generates roughly 1 MWh and earns one credit per month. The credits can then be sold on the SREC market.

    How much you earn by selling credits depends on the current rate and the time your system takes to produce 1 MWh. Generally speaking, credits are worth around $75, which means you can earn about $900 per year selling SRECs. Using this money to pay off your solar loan more quickly or putting it toward your annual energy bill reduces your payback period, lessening the time before your solar panels start saving you money.

    The savings you’ll see through this program depend on how much energy your system produces and the going SREC rates, but using $75 per credit and one credit per month as an estimate comes out to a staggering $22,500 throughout your system’s 25-year life span. Just keep in mind that the value and the possibility of being able to sell your credits depends on demand in your area, so that amount isn’t guaranteed.

    You can find the current rates here on the IPA website.

    I should mention that the program was briefly discontinued in 2021 due to depleted funds but was reinstituted in December of 2021 and has been available continuously since then.

    Another side note is that the rates differ for individual solar — what the program calls distributed generation — and community solar, which is when multiple homes draw energy from a single, centralized solar array.

    Steps to Claim the Illinois Shines Incentive

    As long as you go with a reputable solar installer, you don’t have to do much to take advantage of the Illinois Shines program. Here’s everything you need to do:

    1. Choose a solar installer from my review of the best solar companies in Illinois.
    2. Have a solar power system installed.
    3. Once your system is running, your credits should be logged automatically, and your utility company should pay your solar vendor. The solar vendor then passes the payments on to you, the customer, in the form agreed upon in your contract.

    Illinois Solar For All Program

    My Take: Solar should be available to everyone, especially since it’s one of the best ways to reduce our burden on the environment. For that reason, I love this program and think it’s a great way to make clean energy more accessible.

    The Illinois Solar For All (ILSFA) program is an excellent financing program for low-income households and nonprofits that lets you install solar with no up-front cost.

    The biggest barrier to installing solar panels is the up-front costs, especially for low-income households. The ILSFA program aims to make home solar more accessible to a wider range of the state’s demographic to help the state reach its clean energy goals outlined in its renewable portfolio standard (RPS) and decrease its reliance on fossil fuels.

    The program works by paying solar installers using the RECs that your installed system generates. You don’t have to pay any up-front costs, and you get to enjoy lower energy costs thanks to the credits you earn from the energy the system produces.

    You can use this tool on the ILFSA website to determine eligibility for the program.

    Steps to Claim the Illinois Solar For All Incentive

    If you can’t afford to pay for solar panels in cash or via a loan, and if you qualify for ILFSA, here are the steps you need to take to sign up for the program:

    1. Verify your eligibility using the tool I linked above. Once you determine that you qualify, you’ll need to get official proof from your employer. You can also use your tax return to prove that you qualify.
    2. Apply for the program on the ILFSA website. Once they verify your eligibility, a program administrator will contact you and help you find an ILFSA-approved solar installation company.
    3. ILFSA will set up the installation, and the approved vendor will install the system.

    I want to emphasize that while the ILFSA initiative is a fantastic program for low-income households, you’ll save significantly more money in the long run if you pay cash or finance a solar system with a loan.

    Illinois Property Tax Exemption

    My Take: This is a common perk in the U.S., but by no means does that mean it’s not a great one. It’s automatic and saves thousands over the life of your system.

    Illinois does not include the value of newly installed solar systems in its property tax assessment. This will save you a substantial amount of money over the life span of your solar panel system.

    New solar panel installations are exempt from property tax assessments in Illinois. A study conducted by Zillow several years ago found that solar panels increase your home’s value by 4.1% on average, which would normally cause your property taxes to increase. This program makes increased value from solar systems exempt from property taxes (find out more about solar system tax exemptions), lowering the long-term cost-benefit ratio of going solar for Illinois homeowners.

    The average home value in Illinois is approximately $250,000, and the average property tax rate in the state is around 2.1%. That means that Illinois homeowners save approximately $5,380 over the 25-year useful life span of the typical solar panel system thanks to this property tax exemption.

    Steps to Claim Illinois’ Property Tax Exemption

    Unlike the other incentives I’ve covered so far, you don’t have to do anything to claim the special assessment for solar energy systems. When you install a solar system, the value of your house will increase, but your property tax burden will remain the same.

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    Installs high-quality Maxeon panels

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    Locations in 22 states

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    Which Solar Incentives Are Offered at the Local Level in Illinois?

    The incentives I’ve covered so far are available throughout Illinois and offer significant savings. In this section, I will change gears and discuss some local-level savings only available in specific locations. These incentives don’t offer the same level of savings as the state and federal incentives, but that doesn’t mean they’re not worth pursuing.

    Here are some of the best local incentives available in Illinois:

    • City of Chicago Green Building Permit Programs: These incentives are administered by the City of Chicago and are available to the city’s residents. The Green Permit Program reduces the cost of permits and grants qualifying solar projects priority review status. The Solar Express Program is also part of the Green Building Program and expedites the permitting process for solar panel installations in Chicago.
    • Small Business Improvement Fund: This program provides solar incentives for small businesses. It uses funds from Tax Increment Financing (TIF) and is therefore only available in TIF districts. This program covers 30%, 60%, or 90% of the solar installation costs, depending on the size of the business that’s applying. The small business improvement fund is not for residential customers.

    Net Metering in Illinois – Can You Profit?

    Net metering, or net energy metering (NEM), is a policy that allows people with solar panels to sell any excess energy their systems generate back to the grid for credit. Your utility company handles NEM, and all-electric companies in Illinois — including Ameren and Commonwealth Edison (ComEd) — are required to participate.

    Illinois’ net metering program compensates solar panel owners at the retail electricity rate, which is the price you must pay the utility company for electricity. This favorable system benefits Illinois homeowners, saving them more money than the avoided-cost rate used in many other states.

    Net metering at the retail rate makes things easy to calculate. Every kilowatt-hour your system produces will gain you enough credit to offset the cost of one kilowatt-hour later. That means you can sell excess energy back to the grid when your panels produce more energy than your home needs and use the credit you build up when your system is underproducing, like on cloudy days or overnight.

    The bottom line is that net metering at the full retail rate means significant energy savings compared to what you’d get if you only saved money when your panels generated electricity.

    I should mention that net metering programs are subject to change, and many states are currently reducing the compensation you get from net metering programs.

    Steps to Enroll in Net Metering in Illinois

    Net metering is another incentive that you don’t need to apply for yourself. Your solar installer should handle the process of connecting your system to the grid and enrolling you in net metering with your local utility company.

    Here’s a brief outline of the process:

    1. Your solar contractor will ensure your home has a bidirectional meter installed.
    2. During installation, your solar company will enroll you in net metering with your energy company.
    3. The utility company will inspect your solar system once installed to ensure it meets the requirements to be connected to the grid. Once it deems that your system passes, the company will provide you with permission to operate (PTO).
    4. That’s it! Monitor your energy production and usage for the first few months to make sure you’re being credited for the extra energy your system produces.
    illinois solar incentive programs

    Watch Out For Solar Incentive Scams in Illinois

    More Illinoisans are converting to solar energy each year, and with the increased popularity and attention the solar industry is enjoying comes the threat of scams. There are a few common types of solar scams to watch out for. Luckily, they’re easy to avoid if you know what to look out for.

    • Fake incentives: The simplest — and most successful — type of solar scam involves the scammer fabricating a solar incentive and getting you to pay them to enroll in the non-existent program. You pay the scammer a fee to file a form or start the process and then never hear from them again. The best defense against this type of scam is educating yourself about the real solar incentives available in Illinois. If you get solicited for a solar incentive, do your homework and research it on Illinois governmental websites. If you can’t find any information about it from reputable sources, it’s probably a scam.
    • Stretched truth scams: These scams misrepresent solar incentives to make it seem like you’re getting a better deal than you really are. A common version of this scam is misrepresenting the federal ITC as a tax rebate. Some companies will even include the ITC in the cost of their systems, making it seem like they’re 30% cheaper than they actually are. The best way to avoid this type of scam. You should also ask for a detailed breakdown of the costs — including installation costs — before you sign a contract.
    • Overcharging for products and services: This is similar to stretching the truth but is harder to detect. The average cost of a 7.5-kW solar system in Illinois is $20,475 before applying any incentives. If you get a quote for a similarly-sized system much higher than that, you should consider getting another quote from a different company. Prices vary by location, so you might live in an expensive area, but you can only know if you get several quotes and compare them.

    Bottom Line: Do the Incentives in Illinois Make Going Solar Affordable?

    The overall cost of solar in Illinois is lower than in most other states, partly due to the effectiveness of the state’s solar incentive programs. The average system still costs around $14,000, but with Illinois’ property tax exemption and customer-friendly net metering program, you’ll save substantial amounts of money throughout your solar system’s life. Check out the savings achieved with solar panels.

    Local incentives are scarce once you leave the Chicago area, but the statewide incentives and federal ITC make it one of the more affordable states for going solar.

    We recommend reading our article if you want to learn about the needed solar panels for powering a home.

    Find a solar installer near you that installs top-notch equipment, provides a solid warranty, and can help you determine how to get the most out of Illinois’ solar incentives.

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    On average, homeowners save $5,000–$20,000 with solar panels

    FAQs about Illinois Solar Rebates and Incentives

    Will Illinois cover the cost of solar panels?

    In most cases, no. However, the Illinois Solar For All (ILSFA) program will pay to install solar panels for low-income households. You don’t own your panels when you go solar through the ILSFA program, but it can help reduce your electric bill and is the only way for some residents to afford to install solar panels. I recommend paying cash or taking out a solar loan if you can, but the ILSFA is an excellent option if you can’t afford either alternative.


    How much is the SREC in Illinois in 2023?

    Illinois’s solar renewable energy credit is about $75 per megawatt for 2023-2024. You can find a detailed breakdown on the Power Agency’s website.


    How much does it cost to install solar panels in Illinois?

    Before any solar incentives, it costs $20,475 to install solar panels in Illinois. However, after the federal ITC, that becomes a significantly more manageable $14,333, a savings of $6,143. Remember that your system’s total cost will vary depending on its size and equipment, but it should be close to this estimate. State-level incentives like the Illinois Shines program and property tax exemption make it even more affordable, as do policies like net metering and local green building incentives.


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    Dan Simms

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    Dan Simms worked in real estate management for five years before using his experience to help property owners maintain their own homes. He got his master’s degree in English Literature and Creative Writing, and he now enjoys sharing his knowledge about homeownership and DIY projects with others on Today’s Homeowner. When he’s not writing, he’s usually outdoors with his wife and his dog, enjoying mountain biking, skiing, and hiking.

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    Lora Novak

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    Lora Novak meticulously proofreads and edits all commercial content for Today’s Homeowner to guarantee that it contains the most up-to-date information. Lora brings over 12 years of writing, editing, and digital marketing expertise. She’s worked on thousands of articles related to heating, air conditioning, ventilation, roofing, plumbing, lawn/garden, pest control, insurance, and other general homeownership topics.

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