Aurora, IL Solar Panels

Illinois offers a property tax exemption for residential solar energy systems, which means the added value from installing solar panels on your home won’t increase your property taxes. When you install solar panels, they typically increase your home’s market value, but this exemption ensures you won’t pay higher property taxes on that increased value. This benefit is established under the Illinois Property Tax Code (35 ILCS 200/) and applies specifically to solar energy systems installed on residential properties.

The exemption works by excluding the assessed value of your solar energy system from your property’s total assessed value for tax purposes. While the exact dollar amount of savings varies depending on your local property tax rate and the value of your solar installation, this can result in meaningful annual savings throughout the life of your system. The exemption continues for as long as you own the solar energy system, with no time limit or expiration date. To benefit from this exemption, your solar installation must qualify as a solar energy system under Illinois law, and you should verify with your local county assessor’s office that the exemption is being properly applied to your property tax assessment.

The Distributed Generation Rebate (Smart Inverters) is a state-funded 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 communicating with utility systems. This program offers a straightforward rebate of $300 per kilowatt (kW) of installed solar capacity, which typically translates to approximately $2,000 to $3,000 for an average residential solar system.

The rebate is paid directly to you as a cash incentive after your solar system is installed and operational, helping to reduce your upfront investment in clean energy. To qualify for this program, your solar system must include a smart inverter that meets the program’s technical specifications. Since the information available is limited, it’s important to check with your solar installer or the Illinois state energy office to confirm current eligibility requirements, available funding, and any application deadlines. Programs like this can have limited funding that operates on a first-come, first-served basis, so it’s worth exploring this opportunity as early as possible in your solar planning process.

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 system generates clean energy, it creates these credits that have financial value. Approved solar vendors receive payments for these RECs from utilities and typically pass this value on to you through reduced equipment costs, lower installation prices, or decreased lease payments.

The financial benefit you receive depends on your contract structure with your solar vendor. Illinois Shines uses an “Approved Vendor” model, meaning the vendor receives the REC incentive payments directly and then shares that value with you. The exact dollar amount varies based on your system size, location, and current program rates, which are organized into “blocks” of capacity. You’ll need to work with an Illinois Shines Approved Vendor, and they’re required to provide you with a detailed Disclosure Form before you sign any contract. This form shows exactly how much of the incentive value is being passed through to you.

The program offers 15-year or 20-year REC contracts and includes several project types: you can purchase your system outright (with cash or a loan), enter a lease agreement, or sign a Power Purchase Agreement (PPA) where you pay only for the electricity your panels produce. There are no specific application deadlines for homeowners, but the program operates on a first-come, first-served basis within capacity blocks, so availability can change. Illinois Shines includes strong consumer protections and requires vendors to follow specific rules about sales practices, contract transparency, and customer disclosures – you can review complaint reports and vendor violations on the program website to help you choose a trustworthy installer.

Illinois Solar for All (ILSFA) is a state program that helps income-eligible households, nonprofits, and public facilities access solar energy with no upfront costs. The program was created to expand solar access to communities that have historically faced barriers to renewable energy adoption. Income-eligible homeowners can install solar panels on their property, while renters and homeowners can subscribe to community solar projects that provide electricity bill credits based on solar production.

The financial benefit is straightforward: participants pay no money upfront for solar installation or subscription, and they’re guaranteed savings on their electricity bills. Any ongoing costs or fees you pay will not exceed 50% of the value of the energy your system produces or your community solar subscription generates—meaning you keep at least half of the savings. The program provides these benefits through 15-year contracts where solar developers receive payments for Renewable Energy Credits, which helps offset the cost of your installation or subscription.

To be eligible as a homeowner or renter, you must meet income requirements and work with solar contractors registered with the Illinois Power Agency’s ILSFA program. Nonprofits and public facilities must be located in environmental justice or low-income communities to qualify. Your solar contractor will handle the application process on your behalf. This program offers strong consumer protections to ensure you receive real 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’ll 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 net billing structure where excess energy is credited at the Price to Compare (PTC) rate only—this includes supply and transmission charges but excludes delivery charges. Your credits can only offset PTC charges on your bill, not delivery charges, customer charges, or taxes. The PTC rate varies by utility: ComEd averages 6.8 cents/kWh, Ameren averages 8.3 cents/kWh, and MidAmerican ranges from 3.7 cents/kWh in winter to 6.7 cents/kWh in summer. Under this structure, any unused credits roll over indefinitely until they can be applied to future PTC charges.

Important considerations: The December 31, 2024 deadline represents a significant change in how solar credits work in Illinois. Systems activated before this date receive more favorable full retail rate credits, while systems activated after receive lower PTC-rate credits with more limited bill offset capabilities. Work with your solar provider to properly size your system based on your actual energy usage to maximize savings and minimize forfeited credits.