Naperville, 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 install a solar system, 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 specifically to solar energy systems installed on residential properties.

The exemption protects homeowners from property tax increases that would normally result from the added value of their solar installation. While the exact dollar amount saved varies based on your home’s location and local tax rates, this exemption can result in significant savings over the lifetime of your solar system. The exemption is automatic and continues for as long as you own the solar system, with no expiration date or time limitation. Illinois homeowners should verify with their local county assessor’s office to ensure the exemption is properly applied to their property assessment 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 communicating with utility systems. 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 approved. The amount you receive depends on the size of your solar system—larger systems will receive proportionally larger rebates based on the $300/kW rate.

To qualify for this incentive, your solar system must include a smart inverter that meets the program’s technical specifications. While specific eligibility requirements weren’t available in the source information, these programs typically require that your system be newly installed and connected to the utility grid. It’s important to verify current program availability, funding status, and any application deadlines with your solar installer or the administering utility, 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) – when your solar panels generate clean electricity, they create these credits, which utilities purchase to meet state renewable energy requirements. Working with an Illinois Shines Approved Vendor, you can receive financial benefits from these REC payments, typically passed through to you as reduced installation costs, lower lease payments, or discounted power purchase agreement rates.

The specific dollar amount of the incentive varies based on your project size, location, and current program capacity, as Illinois Shines operates on a “block” system where incentive rates decrease as each funding block fills up. You’ll need to work with an Illinois Shines Approved Vendor who will handle the REC contract (typically 15 or 20 years) and program applications on your behalf. Before signing any contract, you’ll receive a required Disclosure Form that clearly shows how much of the Illinois Shines incentive the vendor is passing through to you, along with all project costs, payment terms, and estimated savings.

The program offers three main financing options: purchasing your system outright (with cash or a loan), leasing the equipment, or entering a Power Purchase Agreement where you pay only for the electricity the panels produce. It’s important to get bids from multiple Approved Vendors to compare offers, ask for customer references, and carefully review all contract terms including what happens if you sell your property. You can check the program’s Block Capacity Dashboard to see current incentive availability and review the Consumer Complaints Report to research vendors you’re considering.

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 monthly bills.

The financial benefit is straightforward: participants pay no money upfront for their solar installation or subscription. Any ongoing costs or fees are capped at 50% of the value of the energy produced, which guarantees meaningful savings on electricity bills. For rooftop solar participants, this means you only pay for half the value of the bill credits you receive. The program achieves these savings by providing payments to solar contractors in exchange for 15 years of Renewable Energy Credits (RECs), which helps offset the system costs.

To be eligible, homeowners and renters 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 participate. Your chosen contractor will handle the application process and ensure your project meets program requirements. This program represents a significant opportunity for eligible Illinois residents to reduce their energy costs while supporting clean energy development in their communities.

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 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. 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 transitions to a reduced credit structure. Your excess energy exports (measured in 30-minute intervals) are 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 January 1, 2025 deadline represents a significant change in how solar credits work in Illinois. Systems connected before this date receive more favorable crediting terms, making timing an important consideration for your solar investment.