Bloomington, 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 a solar system, it typically increases 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 based 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 system, with no expiration date or time limit. To qualify, your solar energy system must be used primarily for on-site energy generation for your residential property. This exemption applies automatically once your solar system is installed and operational, though you should verify with your local tax assessor that the exemption has been properly applied to your property assessment.

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 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 financial benefit is calculated based on the size of your solar installation—for example, a 7 kW system would receive a $2,100 rebate ($300 × 7 kW). This rebate is paid directly to you as cash after your system is installed and operational, helping to reduce your overall investment in solar energy. To qualify, your solar system must include a smart inverter that meets the program’s technical specifications. Since specific eligibility requirements, application procedures, and funding availability can vary, it’s important to confirm current program details and any deadlines with your solar installer or the administering utility before moving 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 system generates electricity, it creates these credits that utilities purchase to meet clean energy requirements. Approved solar vendors receive payments for these RECs and typically pass the financial value on to you through reduced equipment costs, lower installation prices, or discounted lease and power purchase agreement rates.

The specific incentive amount varies based on your project size, location, and current program capacity, as Illinois Shines operates on a “block” system where incentive rates adjust as capacity fills. You’ll need to work with an Illinois Shines Approved Vendor who will handle the application process and REC contract (typically 15 or 20 years). The program offers multiple financing options including outright purchase, solar loans, leases, or power purchase agreements. Before signing any contract, you’ll receive a required Disclosure Form that clearly shows how much of the incentive value your vendor is passing through to you, making it easier to compare bids from different installers.

Important considerations: The program has specific consumer protections in place, and you should obtain multiple bids from different Approved Vendors to ensure competitive pricing. Your solar system can also qualify for utility net metering credits (separate from Illinois Shines) that provide additional bill savings when your panels generate excess electricity. Check the program’s Block Capacity Dashboard to see current availability, as incentive rates and program capacity can change throughout the year.

Illinois Solar for All (ILSFA) is a state program that makes solar energy accessible to income-eligible households, nonprofits, and public facilities serving low-income communities. 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 enrollment on your behalf.

The financial benefit is straightforward: you pay no money 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 system generates in energy value. For renters and others who can’t install panels on their property, the Community Solar option lets you subscribe to a share of a larger solar project and receive credits on your electricity bill based on that project’s production.

To qualify as an income-eligible homeowner or renter, you’ll need to meet specific income requirements and work with a solar contractor registered with the Illinois Power Agency’s ILSFA program. Nonprofits and public facilities must be located in environmental justice or low-income communities to participate. The program provides payments to contractors for 15 years of renewable energy credits, which helps offset your system costs while ensuring you receive guaranteed savings throughout that period.

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

For systems with PTO by December 31, 2024: You receive full retail rate credits for excess energy sent to the grid, which can offset your entire electric bill on a month-to-month basis. Most customers receive kilowatt-hour (kWh) credits that roll over monthly, while customers on time-of-use rates receive monetary credits based on the price of power when their solar energy is produced. However, excess credits expire annually in April or October with no compensation, so properly sizing your system is important to maximize savings.

For systems with PTO on or after January 1, 2025: Illinois transitions to a net billing structure where excess energy is credited at the “Price to Compare” (PTC) rate rather than the full retail rate. The PTC includes only supply and transmission charges, typically ranging from 6.8 cents per kWh (ComEd) to 8.3 cents per kWh (Ameren), with MidAmerican varying seasonally between 3.7-6.7 cents per kWh. These credits can only offset PTC charges on your bill, not delivery charges, customer charges, or taxes. Credits roll over indefinitely until used, but the reduced credit rate means your solar energy exports are valued lower than energy you consume directly from your system.

Important consideration: The December 31, 2024 deadline represents a significant change in how solar credits work in Illinois. Systems activated before this date receive substantially better financial benefits through full retail rate crediting. The transition to net billing reduces the value of exported solar energy by approximately 40-50% compared to the previous structure, making it more important than ever to size your system appropriately and maximize self-consumption of the solar energy you produce.