Solar Panels in Illinois: Costs, Incentives
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Before any federal tax incentives, the average cost for solar panels in Illinois was $35,347 during the second half of 2023. Illinois offers many incentive programs, in addition to federal tax incentives, for installing solar panels.
Illinois Solar For All, for example, helps low-income households add solar panels to their roofs, typically for no upfront cost. Illinois Shines pays an incentive upfront by purchasing solar renewable energy certificates (SRECs) from certain solar panel owners. Due to these programs, solar panels are often much more affordable and have a faster payback rate than in many other states.
Solar costs in Illinois at a glance
Illinois | U.S. | |
|---|---|---|
Typical cost of home solar system before federal solar tax credit | $35,347. | $34,122. |
Typical cost of home solar system after federal solar tax credit | $24,743. | $23,885. |
Median cost per watt | $3.10. | $2.96. |
Average system size | 11.4 kWs. | 11.6 kWs. |
Source: EnergySage, a solar and home energy product comparison marketplace founded in 2012. Data is from the second half of 2023. | ||
Costs and trends in Illinois
Solar panel system costs in Illinois are slightly higher than the national average, at $3.10 per kW in 2023. System sizes are also close to the national average. System sizes trended slightly downward from early 2023 to the second half of the year, from 11.8 kW to 11.4 kW, according to EnergySage.
The Illinois Power Agency requires their approved vendors to provide specific disclosure forms about pricing. This helps customers compare quotes for solar panels. Multiple bids can help customers find the best pricing and maximize the benefits of the available incentives in Illinois.
Residential solar panel policy in Illinois
Illinois has a Renewable Portfolio Standard that requires 25% of the state's energy to come from renewable sources by 2025. The state's Future Energy Jobs Act of 2016 requires the state’s two biggest electric utilities to expand their energy-efficiency programs and makes renewable energy more accessible to Illinois residents.
Illinois tax incentives, rebates and net metering
Net metering/billing
Major investor-owned utilities offer net metering in Illinois. Net metering is a billing mechanism that credits homeowners and businesses for excess solar electricity they generate and send to the power grid. Rural electric cooperatives and municipal electric providers have slightly different net metering policies but also offer net metering.
“Net metering policies and rates for ComEd, Ameren and MidAmerican distributed generation (on-site) residential and small commercial solar customers are changing starting in 2025,” Audrey Steinbach, Senior Program Manager of Illinois Shines, said in an email.
“Currently, Illinois residents and small businesses receive a credit at the ‘retail rate.’ That is, all excess generation sent to the grid is compensated at the rate that customer pays for distribution and supply from the utility," Steinbach said. "Systems that receive retail rate net metering will continue to be credited at that rate for the life of the system. Full retail net metering will no longer be available to residential and small commercial customers interconnecting new renewable systems after December 31, 2024.”
Smart inverter rebate
Residential customers of ComEd, Ameren and MidAmerican can receive a rebate of $300 per kW of DC power if they choose to install a smart solar inverter.
Illinois Solar For All
This program offers a path to rooftop solar that requires no initial payment up front and saves lower-income households money throughout the life of the system. The program defines low-income households as those earning 80% or less of the Area Median Income.
Illinois Shines
The state issues SRECs to solar providers that install renewable energy systems such as residential solar. The solar providers then sell the SRECs to Illinois Shines, and they may pass the savings onto their customers. “Anecdotally, we’ve heard that REC incentives covered about 40% of installation costs,” said Anthony Star, Chief of the Planning and Procurement Bureau at the Illinois Power Agency, in an email.
Energy storage in Illinois
Solar batteries can bring peace of mind that can come with a battery backup, but they often cost thousands of dollars.
“To date in 2024, 3.9% of residential projects that have been verified include battery storage,” Star said. “The programs administered by the IPA (Illinois Shines and Illinois Solar for All) do not include incentives for batteries. A rebate is available through the utilities if a battery is included in an installation that includes a smart inverter. The current rebate level is $300/kWh.”
Can I get financing for a solar panel system?
In addition to tax incentives and rebates, there are options available. Many solar installers offer financing, but you may also be able to finance your solar investment through a home equity loan or home equity line of credit (HELOC). These options may have lower interest rates than financing with an installer, future opportunities for refinancing and possible tax benefits.
Home equity loans and HELOCs are ways to borrow against the value of your home, converting equity into cash. With a home equity loan, you receive a lump-sum payment and then pay it back at a fixed interest rate over an agreed period of time, typically from five to 30 years. HELOCs are more akin to a credit card, something you use as needed. You’ll usually have 10 years to draw from the line of credit, during which time you only have to pay interest, and after that you pay both the principal and interest. HELOC interest rates typically are variable, meaning your monthly payment could rise or fall over time. And with each of these options, you're using your home as collateral.
 Quicken Loans: NMLS#3030 | ||
|---|---|---|
Max LTV85% | Max LTV90% | Max LTV90% |
Min. Credit Score640 | Min. Credit Score640 | Min. Credit Score680 |
National / regionalNational | National / regionalNational | National / regionalNational |
Another option is a solar loan. Many banks, credit unions and online lenders offer these to fund solar panels and installation, with amounts typically from $1,000 to $100,000, and annual percentage rates ranging from 6% to 36%. They function like a personal loan: you receive a lump sum and repay it in equal monthly installments over a set period, typically two to seven years. And unlike with home equity financing, there is no collateral required for a solar loan. This means your home or solar panels aren’t at risk if you miss payments, but you may have to pay late fees.
So, yes, you likely can get financing. If you go this route, compare interest rates, terms and fees with any financing package that a solar provider may offer you to ensure you get the best deal.
