Tax Incentives and Rebates

Federal Solar Investment Tax Credits

"There are federal tax incentives to installing a solar system in 2022 if you meet the criteria established by the U.S. Department of Energy: you must own your home (renters are excluded), the solar panels must be new or are being used for the first time, and you must own your solar panels.

The solar investment tax credit means that you can claim 26% of your total project costs (including equipment, permitting and installation) as a credit on your federal tax return. ($1 credit = $1 less you owe in taxes the following year.) This is different from a tax refund; you must owe taxes to be eligible and claim the reduction in what you owe.

The federal solar investment tax credit is available to all states at 26% for home solar systems that are purchased and installed by December 31, 2022, and decreases to 22% in 2023.

Illinois Solar Rebates and Tax Credits

There is no Illinois tax credit for solar panels, but there are state-administered incentives to support the development of new solar energy generation and help Illinois residents offset the costs.

Illinois Shines: Illinois is one of few states with a Solar Renewable Energy Credit (SREC) program to support the development of solar projects in the state. Homeowners get one SREC for every 1,000 kilowatt-hours produced by their solar panels. According to EcoWatch, “these credits can then be sold to local power companies that are subject to the state’s Renewable Portfolio Standard, which mandates they generate at least 25% of their power from clean sources by 2025.”

Also known as the Adjustable Block Program, which began in January of 2019, this program was so successful that it ran out of funding and was unable to accept new applications in 2021. However, following the Climate and Equitable Jobs Act in September 2021, it was reactivated and officially reopened in December 2021.

Illinois Solar for All (ILSFA): State incentives are available to help income-eligible homeowners, renters, nonprofits organizations and public facilities install solar panels with either affordable or zero upfront costs. Eligible participants partner with vetted ILSFA Approved Vendors to receive affordable solar installations and pay a reduced fee for the energy produced over time.

Solar Net Metering: Homeowners can receive utility credits to “cash in” excess energy generated by their solar systems that isn’t used within their home. It is required by law that local power companies give solar system owners full credit for all excess electricity generated that is exported to the power grid. This also benefits utility companies, which can supply the excess solar electricity to other buildings on the same grid.

ComEd Solar Rebate: Commonwealth Edison (ComEd), the largest electric company in Illinois, offers a rebate for nonresidential systems: $250 for each kilowatt of solar capacity up to 2,000 kW.

Illinois Solar Property Tax Exemption

Installing solar panels will increase your home value, but the resulting increase will not be taxed in Illinois." 

Simon, Shelby "Your Ultimate Guide To Solar Panel Pricing And Incentives In Illinois." Forbes Home,  Updated: Nov 21, 2022, Accessed Dec 2, 2022