As for October 2020, the average cost of a solar panel installation in Illinois varies from $2.63 to $3.55 per watt ($/W), making the total price range from $13,132 to $17,768. This price does not include the Federal Investment Tax Credit or State solar incentives. Potential solar buyers are expected to save between $24,295 to $32,870 over the course of 20 years.
The Federal Investment Tax credit (ITC) – is a state program also known as the Federal solar tax credit. The program gives 26% reduction to federal income taxes if solar panels were installed before December 2019. Income tax deduction is expected to be lowered to 22% in 2021 and eliminated the year after for non-commercial organizations. Companies will still receive 10% reduction of the cost for solar system installation from 2020 onwards.
Property tax break – solar systems are not included in property tax bills for all Illinois state residents, therefore solar buyers are not additionally taxed. However, the exemption is not valid for equipment that is often used in solar systems.
Illinois Solar Renewable Energy Credit (SREC) – to achieve a goal of producing 25% of all electricity in the state from renewable resources, the local government incentivizes its residents to install solar panels by granting one Solar Renewable Energy Credit for each megawatt hour their solar panels produce. Later all credits can be sold for energy to their utility company.
Illinois net metering – this incentive allows utilities to buy back all excess electricity that private solar panels generate. For example, if a solar panel produces between 40 kW and 2 MW excess amount of electricity, the utility company will credit the panel owner the same amount they would to other energy suppliers.
ComEd commercial solar rebates – ComEd, as one of the largest utility companies in Illinois, incentivizes organizations to install solar panels with their new program that helps reduce out-of-pocket costs. All commercial ComEd customers can get a rebate for $250$ per kW but only if solar panel capacity is less than 2000 kW.
Illinois is not the sunniest state in the country, but the recent 80% solar panel price drop and the inevitable electricity cost increase show that installation of a solar system may be a good investment for future life in Illinois.
When you install a solar system, 26% of your project expenses apply toward a credit to offset any taxes you owe that year. This federal tax credit is a major incentive to go solar, but it is going to be phased out by 2024.
To be eligible to claim this credit, you must owe federal taxes.