Waukegan, 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 a solar system, it typically increases your home’s assessed value, but this exemption ensures you won’t pay higher property taxes on that increase. 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 otherwise result from the solar installation’s added value. For example, if your solar system adds $20,000 to your home’s value, you won’t pay the additional property taxes on that $20,000. The actual savings will vary based on your local property tax rate, but this can amount to several hundred dollars per year in tax savings. The exemption remains in effect for as long as you own the solar system, providing ongoing financial benefits throughout the life of your installation. To receive this benefit, your solar energy system must be properly installed and used primarily for residential purposes. Check with your local county assessor’s office to ensure your solar installation is properly documented for the exemption.

Illinois offers a Distributed Generation Rebate for homeowners who install solar energy systems with smart inverters. This state program provides a cash rebate of $300 per kilowatt (kW) of installed solar capacity. For a typical residential solar system, this translates to approximately $2,000 to $3,000 in direct cash back after your installation is complete.

Smart inverters are advanced devices that convert the electricity your solar panels produce into usable power for your home while also helping maintain grid stability. To qualify for this rebate, your solar system must include these smart inverters, which most modern solar installations use as standard equipment. The rebate is paid directly to you as cash, making it a straightforward way to reduce your upfront solar investment costs.

Since specific eligibility requirements, application procedures, and funding availability can vary, it’s important to confirm current program details with your solar installer or the Illinois utility company serving your area. Some rebate programs have limited funding that operates on a first-come, first-served basis, so applying early in your solar journey is typically recommended.

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, which utilities purchase to meet state renewable energy requirements. While approved solar vendors receive the REC payments directly from utilities, many vendors pass this value on to you through reduced equipment costs, lower installation prices, or discounted lease and power purchase agreement rates.

To participate, you must work with an Illinois Shines Approved Vendor who will handle the application process and ensure your system meets program requirements. The program offers 15- or 20-year REC contracts and supports various project types including rooftop and ground-mounted systems. Financial benefits vary based on your system size, location, and the financing option you choose – whether you purchase your system outright, finance it with a loan, enter a lease agreement, or sign a power purchase agreement. Before signing any contract, you’ll receive a required Disclosure Form that clearly shows how much of the Illinois Shines incentive your vendor is passing through to you, along with all project costs and estimated savings. The program includes strong consumer protections and recommends getting multiple bids from different approved vendors to ensure you’re getting the best value for your investment.

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 offers two main ways to participate: installing solar panels directly on your property through the Residential On-Site Solar program, or subscribing to a share of a community solar project if you’re a renter or prefer not to install panels on your home. The program was created to expand solar access to communities that have historically faced barriers to clean energy adoption.

The financial benefits are significant and straightforward. Participants pay no upfront costs for solar installation or subscription. For ongoing costs, you’re guaranteed to save money—your fees will never exceed 50% of the value of the energy your system produces or your community solar subscription generates. This means you’ll always keep at least half of your energy 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, homeowners and renters must meet income requirements that qualify them as “income-eligible” under the program. You must work with a solar developer or contractor that is registered with the Illinois Power Agency’s ILSFA program—they will handle the application process on your behalf. Nonprofit organizations and public facilities can also participate if they’re located in environmental justice or low-income communities. Visit www.illinoissfa.com to find registered contractors and learn more about income eligibility requirements for your household.

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. 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 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. These credits can only offset PTC charges on your bill, not delivery charges, customer charges, or taxes. The average PTC rates in 2024 were 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. Under the new structure, unused credits roll over indefinitely until they can be applied to future PTC charges.

This incentive is available to homeowners who install solar systems with participating Illinois utilities including ComEd, Ameren, and MidAmerican Energy. The December 31, 2024 deadline is critical—systems receiving PTO before this date benefit from significantly more favorable credit terms at full retail rates.