Federal Solar Investment Tax Credit (30%) Buy a new home solar system, and you will be eligible for the 30% federal tax credit. A tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. This credit also applies to energy storage systems that are charged by your solar system.

Illinois Shines: Adjustable Block Program for SRECs The Illinois Adjustable Block Program, also known as Illinois Shines, is a state-administered solar incentive program developed and managed by the Illinois Power Agency. The program provides an upfront payment to the solar installer in exchange for 15 years of Renewable Energy Credits (RECs) generated by new solar systems. The payments made by Illinois utilities vary depending on the system’s size and location.

Net Metering Net metering is a program that requires your electric company to purchase excess electricity your solar panels produce. For example, your system may produce more electricity on a typical sunny day than your home consumes. When solar production exceeds usage, the utility meter will “spin” backward and provide you with credits. These credits can then be used when the solar system is not producing electricity, such as at night. In Illinois, when your solar system produces more electricity than you use, investor-owned utilities are required to compensate you at the full retail value of the electricity. At the end of the year, the remaining credits expire and revert to the utility without compensation.

Special Assessment for Solar Energy Systems Illinois offers a special assessment of solar energy systems for property tax purposes. When a claim for alternate valuation is filed, the chief county assessment officer is required to ascertain two values: the value of the improvements as if equipped with a conventional heating or cooling system and the value of the improvements as equipped with the solar energy system. The alternate valuation is the lesser of these two values.

This guide provides an overview of the different federal, state, and local incentives available to those interested in residential solar. It does not constitute professional tax advice or other professional financial guidance. This overview should not be used as your only source of information. Other sources should be consulted when making purchasing, investment, and tax decisions; or while executing other binding agreements.