Illinois Solar Incentives, Tax Credits & Rebates (Expert Reviewed)

Solar power is gaining momentum in Illinois as homeowners take advantage of generous incentives and rebate programs. While the upfront costs of installing solar panels can be intimidating, the long-term savings and environmental benefits make it a smart investment for many looking into the best solar companies.

We’ve created this comprehensive guide to solar incentives in Illinois. You’ll learn about tax credits, rebates, and performance-based incentives that can help you cut costs. We’ll also answer common questions about solar power and highlight some of the top solar companies in Illinois.

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What Are the Available Illinois Solar Tax Credits and Rebates?

Thanks to Illinois’ Renewable Portfolio Standards, the state must produce 25% of its energy from renewable sources by 2025. It offers several solar incentives to support this goal, ranging from subscription programs to tax rebates.

Illinois Solar for All (ILSFA) Program

This incentive program caters to low-income households who might otherwise not have the resources to access renewable energy. There are two main branches: Community Solar projects and Distributed Generation projects.

The Community Solar program allows renters making 80% or less of the median income to subscribe to an offsite solar energy system and receive credit on their electric bill. There are no up-front costs, and the credit’s size depends on the amount of power the individual system produces.

Low-income homeowners and building owners can participate in the Distributed Generation program by installing ground-mounted or rooftop solar panels for homes on their property. Similar to Community Solar, participants must not make more than 80% of the median income, and there is no up-front cost for participating. You’ll benefit by receiving credits on your energy bills. Contact a nearby ILSFA-approved vendor to see if you qualify.

More Resources:

• Illinois Solar for All homepage
• List of approved vendors
• Distributed Generation pamphlet
• Community Solar pamphlet

Illinois Shines

Also known as the Adjustable Block Program, Illinois Shines is a similar two-branched system to ILSFA, but there are no income limits. Those who already have a solar energy system can register with Illinois Shines and receive 15 years of payments in return for solar renewable energy credits (called SRECs or RECs). You’ll receive credits for each megawatt (MW) of electricity produced over the payback period. Essentially, the state is meeting its clean energy goals by buying solar power from you.

Those who don’t own solar panels can participate by subscribing to an existing solar panel system in your utility company territory. Excess electricity generated by solar panels will result in subscribers receiving credits on their energy bills. Note that substantial changes were made to the program in September 2021 as a result of the Climate and Equitable Jobs Act, so you may need to keep track of updated policies.

More Resources:

• Adjustable Block Program homepage
• Illinois Shines homepage

Net Metering in Illinois

You don’t have to register with one of the above programs to take advantage of Illinois solar incentives. Utility companies, including Commonwealth Edison, Ameren Illinois Utilities, and MidAmerican Energy Company, offer net metering programs that provide energy credits to customers who generate more electricity than they use. You must register with your utility company, ensure interconnection with the power grid, and have a bi-directional meter that measures outgoing electricity.

Roughly 32% of our 1,000 surveyed solar buyers have taken advantage of a net metering program.

• Illinois Attorney General’s statement on net metering 
• Illinois Power Agency’s 2022 Electricity Procurement Plan 

Commonwealth Edison Solar Incentives and Credits

Power company Commonwealth Edison, also known as ComEd, offers its own incentives to customers. Its website has a solar calculator to help homeowners and renters determine which solar programs they qualify for. The company also offers SRECs to residential customers at a rate of 7.1 cents per kilowatt-hour of energy produced. This rebate is subject to income tax requirements.

More Resources:

• ComEd Incentives and Credits 
• ComEd Solar Calculator

Special Assessment for Solar Energy Systems

Installing solar panels increases your property value. You’d ordinarily be taxed on this increase, but Illinois waives the increased property tax on your state return. To qualify, you must file the State of Illinois PTAX-330 property tax form with your local county assessor.

More Resources:

• Special Assessment overview
• PTAX-330 form

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How Does the Federal Solar Tax Credit Work?

If you’re thinking about installing solar panels, you’ll want to know about the federal solar investment tax credit (ITC). This credit lets you deduct 30% of your system’s total cost from your federal taxes, but it’s set to decrease to 26% in 2033.

Here’s how to qualify:

• Ownership: You must own your solar panel system, either outright or with a solar loan (but not through a lease or power purchase agreement).
• Residency: The system must be installed on your primary or secondary residence.
• Costs covered: The credit covers the entire cost, including photovoltaic cells, mounting equipment, inverters, solar batteries, wiring, labor, any solar shingles, and sales tax.

To claim the credit, complete IRS Form 5695 and submit it with your federal tax return (keeping your receipts as proof of purchase).

In our survey of 1,000 solar buyers, 56% said they used the federal tax credit, indicating its widespread impact.

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Solar Panel Costs in Illinois

The cost of solar panels in Illinois varies based on system size, equipment quality, and installation complexity. On average, homeowners can expect to pay around $14,652 before incentives and rebates. Most homeowners pay around $1,214 per panel.* Your choice of solar financing method plays a big part in your long-term cost and savings, though. Here’s a breakdown of the most common options:

• Cash purchase: Paying upfront provides the highest long-term savings and maximizes tax credits and incentives.
• Solar loan: Financing through a bank or solar provider allows you to spread costs over time while still owning the system.
• Solar lease: A third party owns the system, and you pay a fixed monthly rate for electricity, often with little to no upfront cost.
• Power purchase agreement (PPA): Similar to a lease, but instead of a fixed payment, you pay per kilowatt-hour of energy used.

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Steps To Install Solar Panels in Illinois

Switching to solar can help Illinois homeowners lower energy costs and reduce their carbon footprint. Follow these steps for a smooth installation process.

1. Evaluate Your Home’s Solar Potential

Before installing solar panels, assess your home’s suitability. Review your energy bills to determine how much power you need, ensure your roof is in good condition with at least 15–20 years of life left, and check for adequate sunlight exposure, factoring in any shading from trees or buildings to figure out how many solar panels you need.

2. Choose a Certified Solar Installer

Selecting a qualified solar installer ensures a reliable and efficient installation. Look for licensed and insured professionals with strong customer reviews and certifications, such as those from the North American Board of Certified Energy Practitioners (NABCEP). Comparing multiple quotes will help you find the best pricing, equipment, and warranties.

3. Explore Financing Options

Solar panel systems come with upfront costs, but various financing options can make them more affordable. Illinois homeowners can take advantage of the Illinois Shines program and federal tax credits that cover 30% of installation costs. Additional options include solar loans, leases, or power purchase agreements (PPAs), depending on your financial goals.

4. Secure Permits and Approvals

Solar installations require approval from local authorities and utility companies. Check with your homeowners’ association (HOA) for any restrictions, work with your installer to obtain the necessary permits, and apply for interconnection approval with your utility provider to ensure your system can safely connect to the grid.

5. Schedule the Installation

Once financing and permits are in place, your installer will prepare for installation. The process typically takes one to three days, depending on system size and roof complexity. After installation, your utility company will conduct a final inspection and install a bi-directional meter to enable net metering.

6. Monitor and Maintain Your System

To keep your solar system operating efficiently, regular monitoring and maintenance are essential. Use system monitoring tools to track energy production, schedule annual inspections for inverters and batteries, and clean panels periodically to remove dirt and debris. After severe weather, inspect your system for any damage.

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Our Conclusion

Installing solar panels is expensive, but Illinois residents can take advantage of several incentives to reduce costs. Renters can participate in Illinois Shines or ILSFA’s community solar programs, and homeowners may qualify for solar renewable energy certificates (SRECs), net-metering rates, or property tax exemptions.

Our top recommended pick for a solar provider in Illinois is Blue Raven Solar. This provider offers comprehensive benefits, including excellent warranties and financing options. However, Blue Raven Solar may only be available in Chicago and its surrounding areas.

If you’re ready to begin your solar energy journey, use our solar calculator below to determine how much you can save going solar in Illinois.

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FAQs About Solar Incentives in Illinois

Is solar energy allowed in Illinois?

Yes, solar energy is allowed and encouraged in Illinois. Illinois Governor J.B. Pritzker signed a revision to the Homeowners’ Energy Policy Statement Act in June 2021 that ensures homeowners can continue to install solar panel systems without additional red tape or expensive design requirements.

Is solar a good investment in Illinois?

Solar can be a good investment in Illinois, given the rising electricity costs in the state. Solar panels usually pay for themselves within 12 years, but payback could be as low as 6–9 years in areas with SRECs. You’ll need to balance your budget and average electric bills with installation costs to determine if solar is a good investment.

Does Illinois offer any incentives for solar panels?

Yes, Illinois offers many incentives for solar panels. In addition to the federal solar tax credit, it offers the Illinois Solar for All (ILSFA) program for low-income residents and Illinois Shines for renters and homeowners alike.

Is there a solar rebate for Illinois?

In addition to the federal solar investment tax credit, Illinois offers rebates in the form of solar renewable energy credits (SRECs). Homeowners receive these credits for the solar power they produce and can sell them in exchange for a reduction on their utility bills. Many utility companies in the state also have net metering programs to sell surplus electricity.

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Our Rating Methodology

We are committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:

• Solar equipment, installation, and services (25%)
• Warranty and performance guarantees (25%)
• Brand reputation and certifications (15%)
• Financing options (15%)
• Experience (10%)
• Availability (10%)

Total scores are divided by 20 for a final 5-point rating scale.