Illinois Solar Panels

Illinois offers a property tax exemption for residential solar energy systems, which means the added value from installing solar panels won’t increase your property taxes. When you add solar to your home, it typically increases your property’s assessed value. However, this exemption ensures that increase is excluded from your property tax assessment, allowing you to enjoy the benefits of solar without a higher tax bill.

The exemption applies to solar energy systems installed on residential properties and continues for as long as you own the system. There’s no dollar limit on the exemption—whether your solar installation adds $10,000 or $30,000 to your home’s value, that entire amount is exempt from property taxation. To qualify, your system must be designed primarily to provide electricity for your home. The exemption is automatic in most cases, though you should verify with your local assessor that it’s been applied to your property after installation.

The Distributed Generation Rebate (Smart Inverters) is a state program in Illinois that provides cash rebates to homeowners who install solar energy systems equipped with smart inverter technology. Smart inverters are advanced devices that not only convert solar energy into usable electricity for your home, but also help stabilize the electrical grid by managing voltage and power flow. This program rewards you for choosing equipment that benefits both your household and the broader community’s energy infrastructure.

The rebate offers $300 per kilowatt (kW) of installed solar capacity, which typically translates to approximately $2,000 to $3,000 in cash back for an average residential solar system. This money is paid directly to you after your system is installed and operational, helping to reduce your overall investment in clean energy. The rebate amount will vary based on the size of your solar system, with larger systems receiving proportionally higher rebates.

To qualify for this incentive, your solar system must include a smart inverter that meets the program’s technical specifications. You’ll need to work with a qualified solar installer who understands these requirements and can ensure your system is properly configured. It’s important to check with your utility company or the program administrator about current funding availability, as rebate programs can have limited budgets that may be exhausted before the end of the year. Your solar installer can help you navigate the application process and confirm whether funds are still available when you’re ready to move forward with your installation.

Illinois Shines (officially known as the Adjustable Block Program) is a state-run solar incentive program that helps Illinois homeowners and businesses reduce the cost of installing solar panels. The program works through a system of Renewable Energy Credits (RECs) – when your solar panels generate electricity, they also create these credits, which utilities are required to purchase. Approved solar vendors receive payments for these RECs and typically pass some or all of this value back to you through reduced installation costs, lower lease payments, or discounted electricity rates.

The specific financial benefit you receive depends on your project type, system size, and how your solar vendor structures their offer. Illinois Shines doesn’t pay homeowners directly – instead, approved vendors contract with utilities to sell the RECs your system generates over 15 or 20 years. When comparing bids from different solar companies, you’ll receive a standardized Disclosure Form that clearly shows how much of the incentive value is being passed through to you, making it easier to compare offers. The program includes strong consumer protections and requires vendors to meet specific standards before they can participate.

To participate, you’ll need to work with an Illinois Shines Approved Vendor or Designee, and your project must meet program requirements for system design and installation. The program operates on a block structure with limited capacity that gets reserved on a first-come, first-served basis, so incentive levels can change as blocks fill up. You should obtain multiple bids, carefully review all Disclosure Forms, and ask vendors detailed questions about costs, warranties, and what happens if you sell your property. The program offers additional support for projects installed by Equity Eligible Contractors and includes resources to help protect you from problematic sales practices.

Illinois Solar for All (ILSFA) is a state program that makes solar energy accessible to income-eligible households, nonprofit organizations, and public facilities. The program covers the upfront costs of solar installation, so you can start saving on your electric bills without any initial investment. You’ll work with registered solar contractors who handle the installation and program paperwork on your behalf.

The financial benefit is straightforward: you pay nothing upfront, and your ongoing costs will never exceed 50% of the value of the energy your solar system produces. This means you’re guaranteed to save at least half of what your solar panels generate in electricity value. Income-eligible homeowners can install solar panels directly on their property, while renters and homeowners can also participate through community solar subscriptions that provide electricity credits on their bills.

To qualify, you must meet income-eligibility requirements and work with a solar contractor registered with the Illinois Power Agency’s ILSFA program. The program is designed specifically for low-income households and communities, as well as nonprofits and public facilities serving these areas. Your contractor will verify your eligibility and submit your application to the program, which provides payments for 15 years of renewable energy credits to help offset the system costs.

There are no specific deadlines mentioned, though funding availability may vary. Keep in mind that you must use an ILSFA-registered contractor—working with unregistered installers will disqualify you from the program. The program includes consumer protections to ensure you receive genuine economic benefits and are protected from unfair business practices.

Illinois’ Net Billing program determines how you receive credit for the excess solar energy your system sends to the grid. The rules and financial benefits depend significantly on when your system receives Permission to Operate (PTO) from your utility company.

For systems with PTO by December 31, 2024: You receive full retail rate credits for excess energy sent to the grid, which can be carried over month to month. Most customers receive kilowatt-hour (kWh) credits that roll over, while customers on Time-of-Use rates receive monetary credits based on the price of power when the solar energy is produced. These excess credits expire annually in April or October with no compensation, so it’s important to size your system appropriately to avoid forfeiting unused credits.

For systems with PTO on or after January 1, 2025: The program changes to a reduced credit structure. Your excess solar energy is credited at the Price to Compare (PTC) rate, which includes only supply and transmission charges—not delivery charges. This means you’ll receive approximately 6.8 cents per kWh with ComEd, 8.3 cents per kWh with Ameren, or 6.7 cents (summer) to 3.7 cents (winter) with MidAmerican Energy. These credits can only offset PTC charges on your bill, not delivery charges, customer charges, or taxes. However, any unused credits roll over indefinitely until they can be applied to future PTC charges.

The key consideration for Illinois homeowners is the timing of your system’s PTO date. Systems activated before 2025 receive more valuable credits but with annual expiration, while systems activated in 2025 or later receive lower-value credits that never expire. Working with your solar provider to properly size your system is essential to maximize your savings under either structure.