Have you finally decided that 2024 is the year you’ll go solar?
If so, you’ve made the right decision, as switching to solar can help lower or eliminate your electricity bills. This is a massive perk, considering the average electricity bill in the U.S. is over $1,600 a year.
Let’s not forget that solar is renewable and among the cleanest energy sources. So, by using this instead of fossil fuel-based electricity, you can do your part in tackling global warming.
Plus, if you’re a Prairie State resident, you’ll be happy to know that many Illinois solar program options can help make the transition even more affordable.
This guide discusses the top Illinois solar incentives you should know about this 2024, so read on.
Federal Solar Investment Tax Credit (ITC)
The federal solar ITC program is available to eligible taxpayers nationwide, including in Illinois. It’s a dollar-for-dollar credit that reduces the taxes you owe the federal government.
The solar ITC has been around since 2005 and was initially set to expire in 2022. However, in August 2022, Congress extended its expiration date. It even re-upped the rate to 30% for systems installed from 2022 through 2032.
How the ITC Works
The federal solar ITC applies to your total eligible solar PV system cost. The exact rate depends on when you’ve installed the system and its cost.
Suppose you hire a contractor this year (2024) to start and finish your solar energy installation in Chicago. Let’s also say your total eligible costs amount to $20,000.
Because you got your system installed in 2024, you may be eligible for a 30% solar ITC. If so, you can claim a $6,000 (30% of $20,000) federal tax credit.
It’s also worth noting that the federal solar ITC has no minimum or maximum cap or limit. And if you can’t use all your credits in a single tax year, you can roll over the unused portion toward future tax years.
What Happens to the Solar ITC After 2032?
The federal solar ITC is set to decrease twice after 2032.
If you get your solar PV system in 2033, you can only claim a 26% federal tax credit. If you install it in 2034, it will decrease to 22%. The program will expire by 2035 unless Congress decides to extend it again.
What Are the Eligibility Requirements?
First off, you must be a federal income taxpayer. You must also install the system on your primary or second home. Moreover, it must be operational (you already use it to generate power) to qualify for the federal solar ITC.
Another critical requirement is that you must own the system. You can use a solar loan to finance its purchase and installation, but its ownership must be under your name. So, if you lease or rent the system, you won’t be able to claim any federal solar tax credit.
The Illinois Shines Program
Illinois Shines is the state’s version of Solar Renewable Energy Credit (SREC) programs. With this, you receive credits for the energy produced by your solar PV system. You can then sell these energy credits for a profit.
How Illinois Shines Work
You earn one credit for every 1,000 kilowatt-hour (kWh) or one megawatt-hour (mWh) your system generates. You can then sell your credits in Illinois’ local SREC market. Utility companies buy these credits to comply with the state’s Renewable Portfolio Standards (RPS).
How Much Are SRECs?
The Illinois Power Agency (IPA) governs the price of SRECs. For 2024, its proposed price per SREC is between $73 and $84.
So, if your system can generate enough power for at least one SREC per month, it can earn you between $876 and $1,008 within a year.
You can then use the profits you earn however you see fit. For example, if you took out a solar loan, you can use your earnings to make extra payments toward it.
Solar Property Tax Exemption
Considering all the benefits of solar, it’s not surprising that installing PV panels will increase your home’s value. Typically, you’ll have to pay property taxes for this, which, in Illinois, is around 2.23%. So, you’d have to pay taxes worth around $446 a year for a solar PV system worth $20,000.
The good news is that Illinois has a solar property tax exemption. If you buy your solar PV system, you don’t have to worry about your property taxes increasing due to the value your system adds to your home. The state will waive them for you.
Net Metering
Are you a customer of Ameren, ComEd, or MidAmerican? If so, you can participate in their net metering program.
With net metering, your utility provider will install a special electric meter for your solar PV system. This meter will run backward each time your panels generate more power than you use.
You’ll then receive credits for that extra energy that you don’t consume. You can use them whenever your panels don’t produce enough power. For instance, at night, during cloudy days, or when everyone is at home.
So, with your credits, you can still lower or offset your future electricity bills.
City of Chicago Solar Express Permit Program
There are no state-wide solar rebates in Illinois. However, the City of Chicago offers one: The Green Building Permit Program.
This incentive expedites the approval process of rooftop solar PV systems. Before this program existed, the permitting process took 30 days. Today, qualified projects will receive their permits within just one day.
The Green Building Permit Program also comes with reduced fees. The original price was $375. However, if you qualify for this incentive, you’ll only pay $275, as you’ll get a $100 reduction on the permit fee.
Take Advantage of These Illinois Solar Program Options
From the federal solar ITC to SRECs, property tax exemption, and net metering programs, all these are Illinois solar program options you should take advantage of. They can help make your transition to clean energy even more affordable.
All that should be enough reason to start your search for reputable solar energy contractors ASAP. The sooner you do, the sooner you can go green and take advantage of all these incentives.
For more home improvement ideas and tips like this, check out our other recent blog posts!
