Illinois Solar Incentives and Tax Credits (2023)

By Jessica Wimmer

Aug 11, 2023
Modern house with solar panels on the roof against a blue sky.

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Going solar is a big investment, but solar incentives can help you save money on the project. In researching the best solar companies across the country, we’ve learned about various tax rebates and incentives. Here are the best options available for Illinois homeowners.

Homeowners Save $20,000 to $97,000 with Solar Panels on Average Over Typical System Life Span
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Overview of Illinois Solar Incentives

Get an overview of the key solar incentives available to Illinois residents in the table below.

IncentiveWhere It Comes FromWhat You Get

Solar renewable energy certificates (SRECs)

Illinois Power Agency

One SREC for each megawatt hour of electricity your system produces over 15 years

ComEd commercial solar rebate

ComEd

$250 per kilowatt of installed power

Property tax exemption

State government

Waived property tax on home value increase as a result of installing solar panels

Net-metering

Local utility companies

Payment for selling your excess solar energy back to the grid

Federal solar tax credit

Federal government

Ability to claim 30% of your system cost on your federal taxes

 


 

Illinois Solar Incentives, Tax Credits, and Rebates

Illinois offers homeowners and business owners a few ways to save money and maximize their solar investment. See popular solar programs below.

Solar Renewable Energy Certificates (SRECs)

Under the Adjustable Block Program, also known as Illinois Shines, you can earn one SREC for each megawatt-hour (MWh) of electricity your solar system produces for 15 years. This can equal thousands of dollars in savings.

Additional resources:

ComEd Commercial Solar Rebate

One of Illinois’ largest utility companies, Commonwealth Edison, offers rebates for commercial and industrial customers to help reduce solar costs. ComEd customers who install solar panels on their business are eligible to receive $250 per kilowatt (kW) of installed power. The system must be under 2,000 kW in capacity to qualify.

Additional resources:

Property Tax Exemption

Installing a solar power system increases your home value. No need to worry about rising property tax, though. Illinois waives taxes on additional home value from solar equipment. Your property tax will remain the same as before installing solar panels.

Additional resources:

Net-Metering

Net-metering is one of the easiest ways to recoup money while reducing your electric bills. Net-metering is an incentive many states offer in which you can sell the excess energy your system generates to your local utility company for money back. The utility company uses the energy to power the electric grid. All residential-size systems qualify for net-metering.

ComEd offers one of the top net-metering programs in the state for both residential and commercial customers.

Additional resources:

 


 

Federal Tax Credit

The federal investment tax credit (ITC), sometimes referred to as the Renewable Clean Energy Credit, allows you to claim a percentage of your total system cost on your federal taxes the year you install the system. This percentage has changed throughout the years, but it’s currently set at 30% until 2033. The average home solar system in Illinois costs around $16,000, so you can claim $4,800 as a valid tax form expense for a total investment of $11,200.

Only those who own their system can apply, meaning you must buy your system through a solar loan or purchase it in full at the time of installation. The ITC is a onetime credit, but you can carry over excess credit to the next tax year if you can’t use it all when you file. For example, if you owe $3,000 in taxes the year you install and get a $4,000 tax credit, you’ll owe $0 on that year’s federal tax bill and reduce next year’s bill by the leftover $1,000.

You can claim the federal solar tax credit when you file your annual federal tax return. Let your accountant know in advance. If you manage your taxes yourself, you’ll need to fill out IRS Form 5695.

 


 

Illinois Solar Costs

According to EnergySage, the average Illinois solar panel system installation costs around $16,000. This is far less than the national average of $20,650. Illinois also has a shorter payback period than many other states. A payback period is the amount of time it takes to pay off your solar investment. In Illinois, the average payback period is just over five years.

 


 

Is Going Solar in Illinois Worth the Investment?

Yes. Illinois gets adequate sun exposure for most of the year, but that’s not the only reason it’s a good state for solar. Its lucrative solar incentives and lower-than-average solar costs also make it a worthwhile option. Given Illinois’ cold, snowy winters, having backup storage of solar energy can significantly reduce electricity bills during the months your heat is working overtime.

 


 

Our Recommendation

We recommend considering a solar energy system to cut down on energy bills and reduce your environmental impact. Your solar provider can help you determine which solar incentives you qualify for and apply for benefits. The three solar providers we recommend in Illinois are SunPower, ADT Solar, and Sunrun. These companies rank high on our list for their high-efficiency solar panels, long-standing reputation, and customer satisfaction.

Always do your research before committing to a solar provider. We recommend getting at least three quotes to compare pricing, as well as reading customer reviews, speaking with customer support, and checking out efficiency ratings and warranty details.

Homeowners Save $20,000 to $97,000 with Solar Panels on Average Over Typical System Life Span
Get a Quote on Your Solar Installation in 30 Seconds

 


 

Illinois Solar Incentives FAQ

Does Illinois offer incentives for solar panels?

Yes. The state of Illinois offers several solar incentives, including net-metering programs through Commonwealth Edison, waived property taxes on additional home value, and solar renewable energy credits. Residents who own their solar panels also qualify for the federal solar investment tax credit.

Can you really get free solar in Illinois?

For approved vendors, the Illinois Solar for All program waives up-front costs for income-eligible homeowners, renters, and nonprofits and public facilities serving low-income communities. This program lowers ongoing solar costs to below 50% of the solar project’s generated energy value.

Does Illinois have a solar rebate program?

Yes. Illinois net-metering allows you to earn money back by selling your solar panels’ excess energy to your local utility company. Commonwealth Edison (ComEd) offers the state’s top program.

How much does solar cost in Illinois?

Solar costs between $13,600 and $18,400 on average in Illinois. That’s an average of $2.72 to $3.68 per watt. This is below the national average, so we recommend considering going solar to save on utility bills.

 


 

How We Chose the Top Solar Companies

We researched and analyzed dozens of solar panels and solar installation companies. We then formulated a rating system based on each solar installer or manufacturer’s services and products. We weighed several significant factors, including the quality and type of solar panels offered, the customer support network, warranty lengths and limitations, and additional benefits such as mobile apps for monitoring and customer service.

Speaking directly to representatives, we determined how each solar company personalizes its solar panel installation for each home. We also analyzed each company’s warranty options to ensure their product and performance guarantees match or exceed industry standards.

We evaluated each provider based on their rating and history with the Better Business Bureau (BBB) to determine reputation. In addition, we analyzed the 100 most recent Google Reviews for each provider across various locations and branches.

Read more: Our Methodology