Rockford, 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 without paying higher property taxes on that improvement.

This exemption is available to all Illinois homeowners who install qualifying solar energy systems on their residential property. The exemption applies automatically once your solar system is installed and assessed, and it continues for the life of the solar installation. You don’t need to reapply annually—the exemption remains in place as long as the solar energy system is part of your property.

To benefit from this exemption, your solar installation must meet the state’s definition of a solar energy system as outlined in the Illinois Property Tax Code. It’s a good idea to verify with your local county assessor’s office that the exemption has been properly applied to your property after installation. This incentive works alongside other solar benefits to make clean energy more affordable for Illinois homeowners.

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 convert the direct current (DC) electricity your solar panels produce into alternating current (AC) electricity your home can use, while also helping stabilize the electrical grid. 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. For example, if you install a 7 kW system with a qualifying smart inverter, you would receive a $2,100 rebate. This money is paid directly to you as a cash incentive, helping reduce your overall investment in clean energy.

While specific eligibility requirements weren’t available from the official source, these programs typically require that your solar system includes approved smart inverter equipment and is installed by a licensed contractor. It’s important to verify current program availability, funding status, and any application deadlines with your utility company or the program administrator before moving forward with your installation, 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 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 system size, location, and how you choose to finance your solar installation. Illinois Shines doesn’t pay homeowners directly – instead, the incentive value flows through your solar installer to reduce your overall costs. To participate, you must work with an Illinois Shines Approved Vendor who will handle the program application and ensure your system meets all requirements. The program operates on a block system with limited capacity that fills up over time, so incentive amounts can decrease as blocks fill. You’ll receive a required Disclosure Form before signing any contract that clearly shows how much of the incentive value is being passed on to you.

Important considerations: The program offers 15- or 20-year REC contracts, and your financing choice (purchase, loan, lease, or power purchase agreement) affects who owns the system and receives various benefits. If you’re considering solar, it’s wise to get quotes from multiple Approved Vendors to compare how they structure their incentive pass-throughs. The program includes strong consumer protections and requires vendors to provide standardized information to help you make informed decisions.

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 application process and system installation 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 electricity 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. Nonprofit organizations and public facilities must be located in environmental justice or low-income communities to participate. The program involves a 15-year commitment where the environmental credits (RECs) from your system are sold to help offset costs, but you continue receiving the energy savings throughout this period.

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, which can be carried over month to month. Most customers receive kilowatt-hour (kWh) credits that roll over, 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. The good news is that any remaining credits roll over indefinitely until they can be applied to future PTC charges.

The key consideration is the timing of your system’s PTO date, as this determines whether you receive full retail credits or the lower PTC rate. Working with your installer to understand your projected timeline and properly sizing your system will help maximize your savings potential under whichever program applies to you.