Elgin, IL Solar Panels

Illinois offers a property tax exemption for residential solar energy systems, which means the added value of your solar installation won’t increase your property taxes. When you install solar panels, your home’s assessed value typically increases, 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 automatically to qualifying solar installations.

The exemption covers the full value that solar equipment adds to your property assessment. For example, if your solar system adds $20,000 to your home’s value, that amount is exempt from property tax calculations, potentially saving you hundreds of dollars annually depending on your local tax rate. This exemption remains in effect for the life of the solar energy system, providing long-term savings. To qualify, your solar installation must be used primarily for on-site energy generation for residential purposes. There are no application deadlines—the exemption applies as long as the solar system is in place and operational on your property.

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 the solar energy your panels produce into usable electricity for your home, but also help stabilize the electrical grid by managing voltage and frequency. This program rewards you for choosing equipment that benefits both your home and your 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 is a direct rebate payment, meaning you receive actual cash back after your system is installed and operational. The exact amount you’ll receive depends on the size of your solar system—for example, a 7 kW system would qualify for a $2,100 rebate.

While specific eligibility requirements weren’t available from the official source, this program is administered at the state level and typically requires that your solar installation includes qualifying smart inverter equipment. You’ll want 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. Your solar provider can help ensure your system meets the technical requirements and assist with the rebate application 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 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 the financial value on to you through reduced installation costs, lower lease payments, or discounted power purchase agreement rates.

The specific financial benefit varies based on your project type, system size, and current program capacity, as Illinois Shines operates on a “block” system where incentive rates can change as funding blocks fill up. You’ll need to work with an Illinois Shines Approved Vendor who will handle the REC contract and program applications on your behalf. The program offers 15-year or 20-year REC contracts, and you’ll receive a standardized Disclosure Form before signing any agreement that clearly shows how much of the incentive value is being passed through to you.

Your solar system can be purchased outright, financed through a loan, leased, or acquired through a power purchase agreement – each option has different ownership and maintenance responsibilities. The program includes strong consumer protections and requires vendors to follow specific rules around sales practices and contract transparency. You should obtain multiple bids from different Approved Vendors to compare your options, and you can check the program’s complaint and violations reports to research vendors before making your decision.

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 energy access to communities that have historically faced barriers to participation. Income-eligible homeowners can install solar panels on their property, while renters and homeowners can subscribe to community solar projects that provide electricity credits on their utility bills.

The financial benefit is straightforward: participants pay no money upfront and are guaranteed savings. Any ongoing costs or fees you pay will not exceed 50% of the value of the energy your solar system produces or your community solar subscription generates. This means you keep at least half of your solar savings. The program works by providing payments to solar contractors in exchange for 15 years of Renewable Energy Credits (RECs), which helps offset the cost of your installation or subscription.

To be eligible, you must meet income requirements and work with a solar contractor registered with the Illinois Power Agency’s ILSFA program. The contractor will handle the application process on your behalf. Nonprofits and public facilities located in environmental justice or low-income communities can also participate by installing on-site solar projects. This program ensures consumer protections are in place to guard against unfair business practices while helping Illinois reach its renewable energy goals.

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. 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 when the solar energy is produced. However, 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: Illinois transitions to a reduced credit structure. Excess energy exported to the grid (measured in 30-minute intervals) receives credits 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. As of 2024, average PTC rates are approximately 6.8 cents/kWh for ComEd customers, 8.3 cents/kWh for Ameren customers, and 6.7 cents (summer) to 3.7 cents (winter) for MidAmerican Energy customers. Credits under this structure roll over indefinitely until they can be applied to 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 reduced PTC-rate credits. If you’re considering solar, understanding your utility’s specific PTC rate and how the timing of your system’s activation affects your long-term savings is essential for making an informed decision.