The complete list of Illinois solar incentives and tax credits for 2022, plus how to take advantage.
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Illinois may get a little less sun than average, but with above-average electricity costs, the Prairie State is a great place to go solar at home. Factor in a solid SREC market and the federal tax credit and some homeowners can quickly recoup nearly 50% of the cost of a home solar energy system.
Illinois State Solar Incentives
|Solar renewable energy certificates (SRECs)||Illinois Shines helps residential solar producers sell their SRECs to earn additional income|
|Solar for All||The Illinois Solar for All program helps low-income households sign up for solar with no upfront cost|
|State property tax exemption for solar||Value added by home solar is exempt from property tax assessments|
|Net metering in Illinois||Illinois mandates retail rate net metering but credits expire annually|
SRECs in Illinois
Illinois has an SREC program called the Adjustable Block Program, or Illinois Shines. This program is undergoing some changes in the summer of 2022, but the basic premise remains the same: home solar producers can earn 1 SREC for every MWh of electricity produced by their systems and can sell these to earn additional income.
Homeowners sell these SRECs through a market set up by the Illinois Power Agency (IPA). On May 16, 2022, the IPA announced that it will start accepting new applications to sell SRECs on September 1st, having closed the program in July 2022.
New pricing is set to be announced in August, 2022, but prices have typically ranged from around $37 to $76 per SREC. This means most homeowners with a 6 kW array could earn around $360-$750 each year for their SRECs in Illinois.
Payments are usually sent out as a lump sum for systems under 25 kW (most residential systems) or over a 5- or 7-year period for bigger systems and commercial projects.
Note that the SREC program in Illinois is designed to incentivize ongoing decreases in the cost of going solar in the state. This means the price of SRECs declines as more solar energy systems are installed. As such, you stand to make the most from SRECs in Illinois by going solar now instead of waiting.
Illinois Solar for All
The Illinois Solar for All program helps low-income households install solar panels with no upfront costs. Instead, qualifying households pay a reduced monthly fee for power produced, up to a maximum of 50% of the value of the energy produced. This guarantees clean energy savings.
Solar for All is available for residential properties, non-profits and public facilities, and community solar projects that serve low-income customers. The program maintains a list of pre-approved vendors to ensure excellent workmanship and customer protection.
Participants in the Solar for All program can expect no upfront costs to install solar, no ongoing costs (i.e., free maintenance), and fees that won’t exceed 50% of the value of energy generated by the system.
State property tax exemptions in Illinois
Illinois offers a property tax exemption for home solar installations. This means that any value added to your home by installing solar is not factored into property assessments and associated property taxes. Considering solar can add around 4% to the average home, this could save you a lot in property taxes.
Specifically, Section 10-10 of the Illinois Property Tax Code states that homeowners who install solar can file an alternate valuation of their home improvements with the chief county assessment officer.
Illinois also offers a special exemption for residents of counties with fewer than three million inhabitants.
Net metering in Illinois
Utilities must offer retail rate net metering in Illinois, with the exception of cooperatives or municipalities. Credits don’t roll over indefinitely though, and any surplus expires at the annual billing date. As such, it makes sense to try to shift your billing year to end just after your highest consumption months. This gives you a chance to use up any remaining credits for the year.
It’s also wise in these situations to size your system just to meet your needs, then add panels later if your needs increase. Otherwise, you’re paying to produce energy for which the utility won’t compensate you.
Illinois’s net metering rules used to allow utilities to stop offering net metering once they reached 5% of total peak demand in the previous year. With the passing of the Climate and Equitable Jobs Act, however, this 5% cap has been removed. In its place, Illinois state has set a threshold date of December 31st, 2024, or when new utility tariffs are set and approved (whichever is later).
Commonwealth Edison (ComEd) offers one of the best net metering programs in Illinois. As per the current law, credits carry over month to month until the end of the billing year, whereupon they expire. The kind of credits you get each month for surplus energy depends on the price you pay for energy from ComEd and whether you received the utility’s commercial distributed generation rebate (not currently available for residential arrays).
For instance, if you buy energy from ComEd at hourly prices, any net metering credits will also be based on the price of power at the time your array produces it and sends it to the grid. If your bill is based on fixed prices for energy, your credits will simply be measured in kWh. In some cases, ComEd customers actually purchase energy from another supplier. These customers will need to figure out net metering credits with that supplier.
Mid-American also offers net metering and allows for a shorter than 12 months initial billing period. This is because the utility uses either April or October as the annual billing period end. For solar energy customers, the April settlement date will likely make more sense than the October date. That’s because the summer months are usually the highest production months for home solar. The same rules apply re credits for kWh produced, and customers maintain the rights to renewable energy certificates and other incentives associated with solar.
Ameren Illinois also offers net metering to residential customers. Any credits can be used to offset Basic Generation Service costs, meaning you’ll still pay a bill with connection fees and other administrative charges.
In Illinois, net metering customers may be eligible for a Smart Inverter Rebate if they install and use an approved Smart Inverter as part of their solar energy system. Smart Inverters not only convert the direct current (DC) produced by your solar array into usable alternating current (AC), they can also communicate with the electrical grid and can even be operated remotely by a third-party. This means you can sign up to demand management programs with utilities to help manage energy transfer to and from the grid. This may earn customers a rebate from the utility.
If you’re an Ameren Illinois customer with a Smart Inverter that meets eligibility requirements, you can apply for the rebate here.
Final thoughts on state solar incentives in Illinois
If you own your home array and can take advantage of the state’s robust SREC market, Illinois is a great place to go solar. This incentive can net you several hundred dollars each year, seriously reducing your solar payback period. Add in net metering available from public utilities and a state property tax exemption and you’re onto a winner with solar in the state.
For homeowners interested in solar at home but unsure about the upfront cost, check out Illinois’s Solar for All program. Some homeowners can get solar installed for free and then enjoy lower utility payments and the warm fuzzy feeling of helping enhance the green energy grid.