Peoria, 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, under this state exemption, that increase in value is excluded from your property tax assessment, allowing you to enjoy the benefits of solar without paying higher property taxes on the improvement.

This exemption applies to solar energy systems installed on residential properties in Illinois. The financial benefit varies by homeowner depending on your local property tax rate and the value of your solar installation, but it can result in significant savings over the life of your system. There are no application deadlines or time limitations—the exemption remains in effect for as long as you own the solar energy system. This makes solar energy more affordable by ensuring your investment doesn’t result in an ongoing increase to your annual property tax bill.

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 system is installed and operational, helping to reduce your upfront investment in solar energy. To qualify, your solar system must include a smart inverter that meets the program’s technical specifications. While the available information doesn’t specify detailed eligibility requirements or application deadlines, these rebates are typically available on a first-come, first-served basis until program funds are exhausted. It’s important to work with your solar installer to confirm that your system qualifies and to submit your application promptly, as state rebate programs can reach their funding limits quickly. Your installer should be familiar with the technical requirements and application process to help ensure you receive this valuable incentive.

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 installers (called Approved Vendors) receive payments for these RECs from utilities and typically pass this value on to you through reduced installation costs, lower lease payments, or discounted power purchase agreement rates.

The specific financial benefit you receive depends on your project type, system size, and how your installer structures the incentive passthrough. Illinois Shines doesn’t pay homeowners directly – instead, your solar company receives the REC payments and should clearly show on your required Disclosure Form how much of that incentive value they’re passing on to you. The program offers 15-year or 20-year REC contracts and works alongside other benefits like net metering credits (which can reduce your utility bills when your system produces more electricity than you use).

To participate, you must work with an Illinois Shines Approved Vendor, and your installer will handle the program application and permitting process. The program has strong consumer protections, requiring vendors to provide standardized Disclosure Forms before you sign any contract, making it easier to compare bids from different companies. It’s important to get multiple quotes, review the Disclosure Form carefully to understand total costs and savings, and ask vendors specifically how much of the Illinois Shines incentive they’re passing through to you. The program operates on a block system with limited capacity, so incentive levels can change as blocks fill up.

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 to receive electricity bill credits.

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 by the system, guaranteeing that you’ll save at least half of what your solar generates. For rooftop solar installations, this means you only pay for half the value of the bill credits you receive. For community solar subscriptions, you receive electricity credits on your bill based on the project’s production, with the same 50% cost cap ensuring guaranteed savings.

To qualify, you must meet income-eligibility 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 contractor will handle the application process and submit your project to the program on your behalf. The program provides payments to contractors in exchange for 15 years of Renewable Energy Credits (RECs), which helps offset your system costs and enables the no-upfront-cost model.

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 the price of power 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: The program changes significantly. 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. 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. Any unused credits roll over indefinitely until they can be applied to future PTC charges.

Special considerations: The December 31, 2024 deadline represents a significant change in how solar credits work in Illinois. Systems installed after this date will receive substantially lower credit rates and more limited bill offset capabilities. City of Naperville and City of Springfield customers have different programs with 1:1 net metering and annual credit expiration dates in March or April, with Springfield offering approximately 4.3 cents per kWh for excess credits.