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Illinois Solar

Illinois is a state in the Midwestern United States and boasts over 170,000 solar system installations. Illinois is the sixth-most populous state and is home to the large city of Chicago, which is the third largest metropolitan area in the US. The climate is humid continental, with warm summers and cold, snowy winters. Illinois state government policies favor solar incentives. Its adjustable block program and encouraging utility policies make Illinois a favorable place for businesses and residents to install solar panels and battery systems.

Let’s learn about some of those incentives, the utility policies associated with interconnection and setup, and special solar financing plans for solar panels and battery systems in Illinois.

Incentive Programs, Tax Credits, and

Solar Rebates in Illinois

Illinois provides multiple solar energy rebates and incentives that help to reduce the overall cost of solar systems. Our EnergyPal Advisors can help you navigate all of the solar incentives available in Illinois and also apply them to the available solar panel offerings.

In summary: 

• Illinois offers an adjustable block program called Illinois Shines. Each kW of electricity your solar system is capable of producing grants you one Solar Renewable Energy Credit, or SREC, per year for an estimated 15-year system life. You can sell the SRECs in exchange for a hefty discount on your solar system.
• No property tax on any increase in property value from installing solar

Illinois Rebates and Tax Breaks

Here are more details about the incentives available in Illinois:

• Illinois offers an adjustable block program called Illinois Shines. Each kW of electricity your solar system is capable of producing grants you one Solar Renewable Energy Credit (SREC) per year for an estimated 15-year system life. You can sell the SRECs and get a sizable discount on your solar system. This program has a limit on the number of subscribers, and as the program fills up, the value of your SRECs go down.

To figure out your discount, use the chart below to determine the value of one SREC. You will need to know your utility company to figure out your block group, your system size to figure out your block category, and your block number (determined by your place in line).

For example, let’s say you need a 10 kW system. You get 10 SRECs per year for 15 years. That gives you 150 SRECs. Referring to the chart above, if your utility provider is ComEd, you are in Group B. If you act early and get into Block 1, then each SREC is worth $72.97. Your savings would look like this:

150 X $72.97 = $10,945.50 savings

Your system may be rooftop or ground mounted, or you can subscribe to a community solar project. An approved vendor must install your system. Don’t worry—our partners are all approved installers.

• The Special Assessment for Solar Energy Systems is a tax break where you won’t pay additional property taxes if your property value increases when you add a solar system (and with solar, your property value does go up!).
• Illinois has a solar program for low-income owners called Illinois Solar For All. You can either purchase or lease a solar system through an Approved Vendor with no upfront cost and are guaranteed a reduced electricity bill. If you can’t install the panels on your property, you can still benefit through a community solar option.

Other Solar Energy Incentives

The US federal government helps residents and businesses pay for their solar systems. The federal investment tax credit (ITC) allows for a tax deduction of 30% of the cost of a solar system currently. Tax credits can be rolled over if you can’t use the whole credit this year. The ITC cannot be claimed for solar leases or power purchase agreements (PPAs) where the third party financier takes the credits themselves, but that is typically baked into a reduced lease/PPA monthly for you.

If you purchased that 10 kW system for $20,000, your savings from the federal tax credit would look like this:

$20,000 X 0.30 = $6,000 savings

You also would save an additional $10,945.50 by taking advantage of the Illinois Shines program mentioned above. So if the original cost for that system was $20,000, your cost would go down to just $3,054.50!

Utility Policies

Utility policy factors determine what your utility provider pays you for the excess power you produce and what you save on your power bill by reducing electricity usage. Illinois gets an above average score for utility policies.

Net Metering and Interconnection Policy

One important policy for solar customers is called Net Metering. Net Metering is a billing mechanism that allows solar customers to push electricity to the grid for credit that can be used later, like at night when your solar panels aren’t generating power. This incentivizes people to go solar, provides clean energy for others to use and prevents waste. Some states have poorer net metering policies than others, meaning that credits may not be able to be rolled over to the next month or year, or that you don’t earn full watt-for-watt credit for your excess energy.

Illinois’s Net Metering program is favorable. You are paid the full retail amount for your excess energy in the form of a bill credit. Credits can be carried over into the next month but expire at the end of the year. The exact details depend on your electricity provider’s policies.

Solar Setup Fees

You must have a bi-directional meter (necessary for Net Metering), which is installed at no cost. The interconnection fee for most customers in Illinois is $50.

Electricity Prices

Electricity prices in Illinois are average. Usually you don’t want high prices, but with solar, the higher the prices, the more you save, and the more economical a solar system becomes.

According to the US Energy Information Administration, the average total cost of electricity in Illinois is $0.134 per kWh for residents. The national average for all states is $0.134 per kWh, ranging from $0.967 to $0.288 per kWh.

Rate Design

Rate designs are comprised of monthly fees and either a flat or tiered rate you pay for electricity. Good rate designs, which save you money when you conserve energy, are tiered and have low fixed monthly fees. Poor rate designs have flat rates and high fixed monthly fees.

Illinois is about average when it comes to the quality of its electricity bill rate design. It has some tiered rate programs but low fixed fees (around $10–$15 per month).

You still pay fixed monthly fees when you go solar because you are still tied to the grid. Being tied to the grid is a good thing, because otherwise you might not have power at night or if your system stopped working suddenly. Even if you go off of the grid and rely on a battery source, the high cost of the battery would not outweigh the low monthly fee and the savings obtained from a net metering program.

PACE Programs

PACE stands for Property Assessed Clean Energy and is a financing program for solar projects that is tied to the home instead of the homeowner. The PACE program is not available in Illinois.

Other Energy Financing

Solar systems can be financed by bank loans, solar installer financing, new home mortgages, energy loans and home equity loans or lines of credit. Cash works too.

Talk to your EnergyPal Advisor about financing solar options in Illinois. We regularly source the best deals and terms for our customers.