If you’re looking for a way to lower your electric bill, get some distance from your electricity provider, or run your home on clean energy, solar could be an option for you.
Thanks to Illinois’ strong renewable portfolio standard — the state is aiming for 40% renewable energy by 2030 — solar is expected to grow 1,700% over the next five years. The push to green Illinois’ grid isn’t leaving homeowners behind, and those in Chicago can take advantage.
Chicagoans who go solar may be able to take advantage of federal tax credits, statewide rebates, and solar renewable energy credits to cut the cost of solar and boost their savings. Find out if solar makes sense for your Chicago home.
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Does Solar Make Sense in Chicago?
Given that Illinois has enough solar installed to power nearly 500,000 homes, it’s clear that solar can make sense there. Whether or not solar makes sense for your Chicago home depends on a variety of factors.
Credit Solar Energy Industries Association
Price of electricity
Illinois’ average electricity rate for 2023 was 15.71 cents/kilowatt-hour, slightly lower than ComEd’s average rate of 14.78 cents during that same time. The actual rate you pay for electricity may vary throughout the year depending on your rate structure and your electricity supplier. A time-of-use rate will change throughout the day and year.
In general, the more you pay for electricity and the more you use before going solar, the more you stand to save by installing solar panels.
Price of solar
The price of solar has dropped reliably over the past decade (minus a small inflation-related blip in 2023). According to one nationwide estimate, the cost of residential solar panels sits at $3.24 per watt. At that price, a five-kilowatt system would cost $16,200 before incentives. Your actual cost will vary depending on the size of your solar system, the local cost of labor and permits, whether you have a battery installed as well, and the complexity of your roof.
Available sunlight
Chicago gets an annual average of 4-4.25 peak sun hours per day. While it's not the sunniest place in the country, solar can be a valuable addition to your home.
Likely more important is the amount of sunlight you get on your roof. Heavily shaded roofs might not be a good fit for solar panels. A reputable solar installer should do a survey of your roof, whether virtually or in person, before moving ahead with your project.
Outages
Solar panels paired with storage can keep parts of your house powered up during an outage. The size of your battery bank and the number of solar panels you have will determine how much of your home you can back up and for how long.
According to the US Energy Information Administration, Illinois utility customers experienced an average of 208 minutes without power in 2023 and 90 minutes in 2022.
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Solar Incentives in Chicago
While there are plenty of good reasons to go solar, people repeatedly say that saving money is the strongest and most common motivation. The good news is if you go solar in Chicago, there are plenty of incentives that could bring down the cost or boost your overall savings.
Federal tax credit
The federal solar tax credit for residential solar panels, known as the Residential Clean Energy Credit, lets you reduce the taxes you owe by 30% of the cost of a new solar panel system, including its installation. You must own the solar panels and they must be on a home you live in (not a full-time rental property). The credit only counts against your tax liability, but if your tax liability is too small, you can roll the excess credit forward to later years.
If installing solar panels costs you $15,000, the maximum allowed tax credit would be $4,500.
Everyone’s tax situation is different, so always check with your tax advisor about your eligibility.
Net metering
Net metering is how solar owners are compensated for the electricity their panels produce but send back to the grid. While true 1-to-1 net metering means every kilowatt-hour you send to the grid would generate one kilowatt-hour credit on your bill, many utilities are switching to other models, like net billing.
Illinois recently changed net metering for its large investor-owned utilities, including ComEd. Under the new net billing system, called supply-only net metering, credits will cover the supply charges but not the delivery charges or set fees. Bill credits for electricity sent back to the grid would have been worth about 6.8 cents/kWh in 2023.
This new system will be in place for residential systems that get permission to operate after December 31, 2024.
Solar and storage rebate
ComEd customers who go solar may be able to claim a $300/kW rebate for residential solar systems and a $300/kWh rebate for attached storage. You’ll need to enroll in a time-of-use rate to claim the storage rebate. The program is currently slated to run through 2029.
Solar renewable energy credits
Solar renewable energy credits (SRECs) represent one megawatt-hour of solar electricity generated. Utilities and other entities can buy SRECs to cover their legal obligations for renewable energy. In states with markets, SRECs can be sold, usually with the help of a broker.
Illinois Shines, also known as the Adjustable Block Program, pays an upfront lump sum in exchange for 15 years' worth of SRECs. The incentive is open to ComEd customers and can be worth thousands of dollars.
Property tax exemption
Solar panels can increase your home’s property value. If they do, you won’t be taxed on the increase thanks to Illinois’ solar property tax exemption.
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Solar Payback Period in Chicago
A solar payback period is the time it takes for the savings from your solar system to match your costs. It’s influenced by the total cost of going solar, the incentives you receive, how much you save each month, and how your cost of electricity changes. Here’s how you can estimate your payback period.
( Total cost - Total incentives ) / Annual savings = Solar payback period in years
Payback periods are just estimates at the beginning of your solar panels’ life. They could change if electricity prices change more or less than expected. Over the 10 years from 2013 to 2023, average residential electricity rates rose 47%, from 10.58 cents/kWh to 15.71 cents/kWh.
Credit: US EIA
ComEd and Rooftop Solar Panels
Unless you go completely off the grid, you’ll likely rely on your utility for some electricity, and you will still receive a bill. Your utility will also grant final permission to operate your solar panels, a key step in the installation process.
| 2023 average electricity rate (cents/kWh) | 2023 average net billing credit (cents/kWh) | Net metering style | Max system size for net billing | Max offset | |
|---|---|---|---|---|---|
| ComEd | 14.78 | 6.8 | Net billing | 25 kW AC | None |
Actual electricity rates and net billing credits will change over time. The billing credit listed here is a calculation of what the credit would have been if supply-only net metering had been in place for 2023.
Gas utilities and home electrification
You probably have two utility bills if you use gas at home, whether for heating, cooking, or something else. Home electrification (swapping your gas appliances for electric ones) can eliminate your gas bill. Paired with home solar panels, it could save you money.
If you’re looking to get rid of your Nicor Gas, North Shore Gas, or Peoples Gas bill, check out Palmetto’s home electrification resources.
Leasing Solar Panels in Chicago
Third-party ownership (TPO) lets homeowners install solar panels at home without purchasing or owning them. This has one big advantage: lower upfront cost. Instead of purchasing the panels upfront, you’ll pay monthly fees for the equipment (under a lease) or the electricity it generates (under a power purchase agreement). Because you don’t own the solar panels, you’ll likely miss out on incentives that go to the owner, like the federal tax credit or Illinois Shines.
Palmetto’s TPO option, the LightReach Energy Plan, comes with predictable monthly payments, a production guarantee, and full service and monitoring for the lifetime of your agreement. It also includes the option to buy the system beginning in year five.
Solar Panel Maintenance in Chicago
Solar panels can be low-maintenance equipment, but some Chicago solar companies will offer maintenance and protection plans for when issues crop up. Palmetto Protect, for example, has proactive monitoring, system issue detection, and access to a pre-vetted service network. You can add a production guarantee and coverage for parts and labor with a Performance plan.
Maintenance and repairs should be done by a professional to avoid nullifying warranties.
One bit of maintenance you can handle yourself is cleaning your solar panels during a dry period. Rain and snow will clean them naturally. Be sure to follow the manufacturer’s recommendations.
Solar panels and snow
You can count on about three feet of snow during a Chicago winter, though 1978-79 saw over seven feet!
Snow typically melts off solar panels quickly, but you might want to clear solar panels of heavy snowfall that takes longer to melt. Make sure you’re doing so safely and without damaging or scratching your panels.
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Finding the Best Solar Companies in Chicago
It’s best to partner with a reputable solar company to install your solar panels. Solar installers have the knowledge and experience to get the permits and permissions needed to install solar panels and connect them to the grid, not to mention designing a solar system that works for you.
But how do you find the best solar company for you? Here are some tips.
- Read reviews to get a balanced picture of the company.
- Talk to friends or neighbors who have experience with the company.
- Make sure you get answers to all your questions.
- Make sure you have time to make decisions on your own terms.
- Compare warranties and post-installation services.
Palmetto Reviews
“Great experience with Palmetto solar. Solar is really helping my electric bill since my house is all electric. Nice people to deal with and reliable. Would recommend them highly.” Linda C. 10/18/2024 Google Review
“Had a great experience with Palmetto Solar when switching to solar. My utility company was not easy to work with and delayed several steps in the process. Palmetto [kept] working tirelessly to help move everything forward and kept communicating so I knew what was going on. Even now that everything is hooked up and working, any questions I have a[re] quickly answered and customer service is always helpful and friendly.
Plus my panels are working wonderfully!” Lindsay M. 10/23/2024 Google Review
“We feel great helping the environment, reducing our costs, and partnering with Palmetto! Great customer service and communication!” Wes B. 10/21/2024 Google Review
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Frequently Asked Questions
Do solar panels make sense in the Chicago area?
Solar panels can definitely make sense. Robust state incentives can bring the cost of solar panels down. Solar can help ComEd customers avoid buying utility electricity, and you may earn bill credits.
Whether solar makes sense for you depends on your specific circumstances. Reach out today to explore whether solar makes sense for you.
Does Chicago have net metering?
ComEd is switching to a net billing system, called supply-only net metering, for solar panels that get permission to operate in 2025 and later. Bill credits for solar electricity sent back to the grid will apply only to the supply charge.
Is Chicago too snowy for solar panels?
No. Snow melts off of solar panels faster than it does other surfaces. Large snowfalls may require cleaning panels off, but solar panels can keep generating electricity through the winter. Solar panels are most efficient in the cold.
What is the average cost of solar panels in Chicago?
The Solar Energy Industries Association says the average cost of residential solar panels was $3.24 in the second quarter of 2024. The best way to find out how much solar panels will cost at your house is to get a quote from a reputable solar company.
Do solar panels increase your home value?
Solar panels often increase the value of your home. In Chicago, you won’t pay taxes on that increase thanks to Illinois’ solar property tax exemption.
Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.
Andrew BlokWriter and EditorAndrew has worked as a journalist and writer for four years, over half of those dedicated to covering solar. He currently lives in Tucson, AZ, where you might run into him walking his dog and birding while dodging the heat. He has degrees in English education and journalism.
