Springfield, IL Solar Panels

Illinois offers a property tax exemption for residential solar energy systems, which means the added value from installing solar panels on your home won’t increase your property taxes. When you install solar panels, they typically increase your home’s market value, 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 works by excluding the assessed value of your solar energy system from your property’s total assessed value for tax purposes. While the exact dollar amount of savings varies based on your local property tax rate and the value of your solar installation, this can result in meaningful annual savings throughout the life of your system. To qualify, your solar energy system must be used primarily for on-site energy generation for your home. There are no application deadlines or time limitations—the exemption applies automatically once your solar system is installed and assessed, and it continues for as long as you own the system. Your local assessor should apply this exemption when evaluating your property, though it’s wise to verify that it has been properly applied to your property tax bill.

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 the broader community’s energy infrastructure.

The rebate provides $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. The rebate amount will vary based on the size of your solar system—larger systems will receive proportionally higher rebates.

To qualify for this incentive, your solar system must include a smart inverter that meets the program’s technical specifications. You’ll need to work with a qualified solar installer who understands these requirements and can ensure your system is properly configured. It’s important to check with your utility company or the program administrator about current funding availability, as rebate programs can have limited budgets that may be exhausted before the end of the year. Your solar installer should be able to help you navigate the application process and confirm eligibility before you commit to your installation.

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 you receive depends on several factors, including your system size, location, and the current incentive rate available when your project is approved. Illinois Shines operates on a “block” system where incentive rates decrease as more solar capacity is added statewide, so applying earlier generally means higher incentive values. To participate, you must work with an Illinois Shines Approved Vendor, who will handle the application process and REC contract on your behalf. The program offers 15-year or 20-year REC contracts, and you should carefully review your vendor’s Disclosure Form to understand exactly how much of the incentive value will be passed through to you.

Important considerations include comparing bids from multiple Approved Vendors, understanding your financing options (purchase, loan, lease, or power purchase agreement), and ensuring your roof or property is suitable for solar installation. The program includes strong consumer protections and requires vendors to provide standardized Disclosure Forms before you sign any contract. You can also pursue additional savings through net metering credits with your utility and other available rebates, which are separate from the Illinois Shines incentive.

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 bill credits based on solar production.

The financial benefit is straightforward: participants pay no money upfront and are guaranteed savings on their electricity bills. 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, which helps offset the cost of your installation or subscription.

To be eligible as a homeowner or renter, you must meet income requirements and work with a solar contractor registered with the Illinois Power Agency’s ILSFA program. Nonprofits and public facilities must be located in environmental justice or low-income communities to qualify. Your contractor will handle the application process on your behalf. There are no specific deadlines mentioned, though funding availability may vary. This program offers strong consumer protections to ensure you receive genuine economic benefits and are protected against unfair business practices.

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.

Systems with PTO by December 31, 2024: You’ll 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.

Systems with PTO on or after January 1, 2025: The program changes significantly. Your excess solar energy will be 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 December 31, 2024 deadline is critical—systems receiving PTO before this date will continue receiving full retail rate credits, while systems receiving PTO after will receive the lower PTC rate. Work with your installer to understand the timeline for your project and how these changes may affect your long-term savings.