Illinois

Illinois offers a property tax exemption for solar energy systems, which means homeowners don’t have to pay property taxes on the added value that solar panels bring to their home. When you install solar panels, they typically increase your home’s assessed value, but this incentive ensures you won’t see a corresponding increase in your property tax bill due to that added value.

This exemption applies to both residential and commercial solar installations and covers the full assessed value increase from the solar system. There are no specific dollar amount caps mentioned in the statute, meaning the entire value addition from your solar installation is exempt from property taxation. The exemption helps make solar more affordable by eliminating what could otherwise be a significant ongoing cost increase for homeowners who choose to go solar.

To qualify, your solar energy system must be properly installed and meet standard requirements for solar installations in Illinois. The exemption is automatic once your system is assessed – you don’t need to file separate paperwork beyond your normal property assessment process. This incentive remains in effect for as long as you own the solar system, providing long-term savings on your property taxes and making your investment in clean energy even more valuable.

The Illinois Distributed Generation Rebate (Smart Inverters) is a state-funded cash rebate program that provides $300 per kilowatt (kW) of solar capacity installed when your system includes smart inverter technology. Smart inverters are advanced devices that convert the direct current electricity your solar panels produce into alternating current electricity your home can use, while also providing grid stability benefits.

For a typical residential solar system ranging from 7-10 kW, this rebate translates to approximately $2,000 to $3,000 in direct cash back. The rebate is calculated based on your system’s total capacity, so larger systems receive proportionally higher rebates. This incentive is separate from federal tax credits and can significantly reduce your upfront solar installation costs.

Please note that specific eligibility requirements, application deadlines, and funding availability may vary and should be confirmed with your solar installer or the Illinois state energy office, as program details can change based on available funding and policy updates.

Illinois Shines is a state-run solar incentive program that helps homeowners and businesses reduce the cost of installing solar panels through Renewable Energy Certificate (REC) payments. The program works by having approved solar vendors receive incentive payments from utilities, which they can then pass on to customers in the form of reduced equipment costs, installation fees, or financing terms. This creates an indirect financial benefit that makes solar more affordable for Illinois residents.

The program supports various types of solar projects including small residential systems, large commercial installations, and community solar options. To participate, you must work with an Illinois Shines Approved Vendor who handles the application process and ensures your system meets program requirements. The vendor receives REC payments over a 15- or 20-year contract period and may pass these savings directly to you through lower upfront costs or reduced monthly payments depending on your financing arrangement.

Important considerations include that incentive availability operates on a block system with limited capacity, so timing matters for securing benefits. The program includes strong consumer protections, requiring vendors to provide detailed Disclosure Forms before you sign any contract. You can choose from multiple financing options including purchasing your system outright, leasing, or entering a power purchase agreement, each with different ownership and maintenance responsibilities.

Illinois Solar for All (ILSFA) is a state program that makes solar energy accessible to income-eligible households, nonprofits, and public facilities throughout Illinois. The program was created under the Future Energy Jobs Act and is designed to bring solar benefits to communities that have historically been underserved by clean energy programs.

The financial benefits are significant: participants pay no upfront costs for solar installations and are guaranteed savings on their electric bills. For rooftop solar installations, homeowners only pay for half the value of the bill credits they receive from their solar system. Community solar subscribers receive electricity credits on their bills based on their share of a solar project’s production. The program ensures that ongoing costs and fees never exceed 50% of the energy value produced by the solar system.

To be eligible, homeowners and renters must meet income requirements and work with solar contractors registered with the Illinois Power Agency’s ILSFA program. Nonprofit organizations and public entities must be located in environmental justice or low-income communities to participate. All solar systems are backed by 15-year Renewable Energy Credit agreements that help offset costs.

There are no specific deadlines mentioned in the program materials, but participants must work through registered solar developers who handle the application process. The program offers strong consumer protections to ensure participants see real economic benefits and are protected from unfair business practices. Visit www.illinoissfa.com to learn more about participation options and find registered contractors in your area.

Illinois’ Net Billing program allows homeowners with solar panels to receive credits for excess electricity they send back to the power grid. The value of these credits and how they work depends on when your solar system receives Permission to Operate (PTO) and which utility company serves your area. Major utilities like ComEd, Ameren, and MidAmerican Energy all participate in this program, though each has slightly different terms.

For solar systems that receive PTO by December 31, 2024, you’ll benefit from full retail net metering at 1:1 credit rates – meaning you receive the same rate for excess power you send to the grid as you pay for power you use. However, starting January 1, 2025, the program changes significantly. New systems will only receive credits at the “Price to Compare” rate, which is substantially lower – averaging 6.8 cents per kWh with ComEd, 8.3 cents with Ameren, and varying seasonally with MidAmerican (6.7 cents summer, 3.7 cents winter). These credits can only offset supply and transmission charges, not delivery fees or other bill components.

The December 31, 2024 deadline is critical for maximizing your solar investment’s value. Systems installed before this date maintain grandfathered status with better credit rates, while credits typically expire annually in April or October with no cash compensation. For systems installed after 2025, credits roll over indefinitely but at the reduced rates. Homeowners should carefully consider system sizing to avoid generating excess credits that may expire without value, particularly under the pre-2025 rules.