Illinois Solar Incentive Programs

Illinois has long been a top state in the country for solar due to surprisingly abundant solar resources, a strong statewide incentive program, and a renewable portfolio standard that put into law the goal to produce 25% of the state’s electricity from renewable sources by 2025. According to Illinois.gov, as of 2023, only 13.5% of the state’s electricity came from renewable sources. 

Ranking 10th in total installed capacity, Illinois has seen a sharp increase in solar installation since 2018, when the first version of the state’s Solar Renewable Energy Credit (SREC) plan, called the Adjustable Block Program, became available. 

SEIA notes that as of March 2025, only 3.21% of Illinois homes have solar, and they’re projecting an additional 10 GW of capacity to be added over the next 5 years. Even as the state transitions to NEM 2.0, Illinois is poised to be a continued leader in solar and renewable energy. 

For a full list of incentives available to a homeowner, talk to your solar installer or visit DSIRE.org

Federal Incentives

Federal Investment Tax Credit (ITC)

Residential solar systems installed in Illinois are eligible for the Federal ITC, which provides up to 30% credit toward the total cost of a solar system. The Inflation Reduction Act (IRA) of 2022 extended the 30% credit through 2032. Starting in 2033, the ITC value will drop to 26% followed by a drop to 22% in 2034. 

The credit is non-refundable, meaning it cannot exceed the amount you owe in tax and would not directly increase any refund you would receive. Excess credit can be carried forward and used in future years. 

The IRA also included standalone or retrofitted energy storage projects, so batteries added to the system’s quality for the 30% tax credit. 

Modified Accelerated Cost Recovery System (MACRS)

IRS section 179 depreciation allows certain qualified properties to be classified as 5-year properties, and tax credits are taken on the depreciation. This credit applies to commercial sites and certain investment properties. Specific information on what qualifies can be found on the IRS website.

State Incentives & Programs

Adjustable Block Program (Illinois Shines) SREC

The Adjustable Block Program is a Solar Renewable Energy Credit (SREC) program that pays homeowners or third-party owners of solar PV installations based on the amount of power generated by the solar energy system. The program defines one SREC as 1 MWh or 1,000 kWh. If a system were estimated to produce 10,000 kWh in a year, the system would generate 10 SRECs that are sold exclusively to the utility companies for a fixed rate. 

Under the program, solar systems between 0-10kWac can estimate 15 years’ worth of SREC generation and be paid the full lump sum after a project is installed. Depending on the Approved Vendor a homeowner is working with, payment could come to a homeowner within one to two years after installation. 

The ABP has seen very high demand and gone through multiple iterations. As it is a block program, as certain capacity thresholds are met, the value of each SREC decreases. The Illinois Power Agency released their final 2025-2026 Program Prices, representing a 10% decrease from 2024 for systems below 25 kW:

So, an example home producing 10 SRECs per year over 15 years would generate 150 SRECs. If that system were 8 kW in size and in Group B (ComEd and rural electric co-ops), the potential homeowner payment would be around $11,322 before any fees are taken out.

Illinois Solar For All

Illinois Solar For All (ILSFA) is another part of the Illinois Shines program that offers incentives for going solar, but is focused on low-income or underserved communities. To be eligible for ILSFA, a household’s gross income may not exceed 80% of the area median income for the county in which they live. 

If a home qualifies, ILSFA-approved vendors can set up third-party ownership agreements with homeowners where there is little to no cost to the homeowner. By setting up a third-party ownership agreement, the solar installer receives the SREC incentive, and under the ILSFA program, the incentive is large enough to cover most, if not all, of the costs associated with the solar installation. 

Property Tax Exemption

Solar energy systems installed on homes in Illinois are exempt from contributing to increases in property tax. Through filing a PTAX-330 form with the county assessor’s office, homeowners will not have to pay any additional property taxes due to increases in their property value after solar is installed. Owned solar energy systems have been found to increase home values by 5%-10%, so this exemption can save homeowners a lot. 

Distributed Generation Rebates – ComEd and Ameren

Illinois’ two major utilities, ComEd and Ameren, offer rebates for homes that install “smart” equipment associated with solar. These incentives have been offered for several years, but required homeowners to give up full-rate net metering to receive the benefits. At the start of 2025, Illinois as a whole moved away from full-rate net metering, so the benefit is more commonly taken. 

For the installation of smart inverters, meaning an inverter that can communicate with the internet, homeowners can receive $300/kW of DC nameplate capacity. So an 8 kW solar array can receive $2,400 in upfront incentives. 

The DG rebates also $300/kWh for battery storage that is installed with solar PV. If the same homeowner who installed the 8 kW solar array also put in a 10 kWh battery, they could receive an additional $3,000. When taking the battery incentive, homeowners must utilize the utility’s real-time pricing model. 

Net Metering

As has been mentioned above and in a previous article, Illinois moved to NEM 2.0 beginning in January of 2025. Previous to 2025, Illinois solar homeowners would receive the full retail rate for any power that was sent back to the grid, with one annual zero-out. This allowed many homes to go solar without installing battery storage, because they received the same value for their power whether it was stored in the home and used later, or sent out to the grid. 

Under the current version of net metering, solar homeowners only receive credit toward the supply portion of their bill and pay the full amount of delivery and taxes and fees. The supply portion of Illinois electric bills generally represents under 50% of the total cost, so a large portion of the bill is unaffected by excess solar generation. 

The reduction of net metering benefits in Illinois will drive more battery adoption in the state as homeowner look to make better use of their power. 

Solar In Illinois

Even though metering rates have changed and will result in lower savings for homeowners, Illinois is not the first state to reduce NEM benefits and won’t be the last. The state is still projected to greatly increase its installed solar capacity, and homeowners have many rebate options available to help offset the cost of solar. 

Illinois will continue to be a top state for solar capacity in the US for the foreseeable future.