Chicago, IL 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 panels to your home, they typically increase 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 energy without facing higher annual property tax bills.

The exemption applies to solar energy systems installed on residential properties and remains in effect for the life of the system. There’s no dollar limit on the exemption—whether your solar installation adds $10,000 or $50,000 to your home’s value, that entire increase is exempt from property taxation. To qualify, your solar system must be used primarily for on-site energy generation for your home. The exemption is automatic in most cases, though you should verify with your local county assessor’s office that it has been properly 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 electric grid by communicating with utility systems. This program rewards you for choosing equipment that benefits both your household and the broader community.

The rebate pays $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.

While specific eligibility requirements weren’t available in the source information, these programs typically require that your solar system includes qualifying smart inverter equipment and is connected to the utility grid. It’s important to confirm current program availability, funding status, and any application deadlines with your solar installer or the program administrator, as state rebate programs can have limited funding that may be allocated on a first-come, first-served basis.

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), where approved solar vendors receive incentive payments from utilities and typically pass those savings on to customers through reduced equipment costs, lower installation prices, or discounted lease and power purchase agreement rates. The program is administered by Energy Solutions on behalf of the Illinois Power Agency and offers different incentive levels depending on your project type and whether you work with an Equity Eligible Contractor.

To participate, you must work with an Illinois Shines Approved Vendor or Designee who will handle the application process and REC contract on your behalf. The program offers 15-year or 20-year REC contracts and supports various project types including rooftop and ground-mounted systems for homes and businesses. Financial benefits vary by project and vendor, so it’s important to review the required Disclosure Form that vendors must provide before you sign any contract—this form shows exactly how much of the incentive will be passed through to you and helps you compare bids across different vendors. The program operates on a block system with limited capacity, so incentive rates can change as blocks fill up, making it important to check current availability and act when you’re ready to move forward.

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 no money upfront, and your ongoing costs will never exceed 50% of the value of the electricity your solar system produces. This means you’re guaranteed to save at least half of what your system generates. 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 bill credits based on solar production.

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 administered by Elevate Energy and provides payments to contractors in exchange for 15 years of Renewable Energy Credits (RECs), which helps offset your system costs. Nonprofit organizations and public facilities located in environmental justice or low-income communities can also participate by installing on-site solar projects. Visit www.illinoissfa.com to learn more about eligibility and find registered contractors in your area.

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. Most customers receive kilowatt-hour (kWh) credits that roll over month to month, while customers on Time-of-Use rates receive monetary credits based on the price of power when the 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 your savings.

For systems with PTO on or after January 1, 2025: The program transitions to a reduced credit structure. Excess energy exported to the grid (measured in 30-minute intervals) is credited at the “Price to Compare” (PTC) rate, which includes only supply and transmission charges—not delivery charges. These 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 in winter to 6.7 cents in summer. Under the 2025 rules, unused credits roll over indefinitely until they can be applied to future PTC charges.

This incentive is available to residential solar customers across Illinois, though specific details vary by utility provider (ComEd, Ameren, MidAmerican, City of Naperville, and City of Springfield). The December 31, 2024 deadline represents a significant change in how solar credits are valued, making it an important consideration for homeowners planning to go solar.