Are you considering installing solar panels in Illinois? Making the switch to solar can be intimidating, so you’re probably wondering if the investment is worth it. Well, you’ve come to the right place.
We’re going to break down all the things you need to know to determine if solar panels are a worthy investment for your Illinois home. But first, let’s talk about the solar market in Illinois for a second. It’s a unique market and one that’s poised for growth.
Illinois state law requires that 25% of the state’s power comes from renewable resources (like solar) by 2025. In 2019 alone, 8,300 of ConEd’s customers installed solar panels on their rooftops, up from just 900 in 2017.
Community solar plans, state rebates, net metering programs, and more make Illinois an up-and-coming hot spot for solar energy. But does it make sense for your house?
Let’s break down the costs, incentives, rebates, net metering, and more, so you can decide for yourself if solar panels are worth it in Illinois.
The Cost of Solar Panels in Illinois
The cost of solar panel installation in Illinois varies depending on size, location, installer, and more. However, the average solar panel installation cost in Illinois ranges from $13,132 to $17,768 gross (for a 5kW system). If you’re interested in a price per watt, the average sits at around $2.63 to $3.55.
Now, before you look at that number and turn the other way, there are several things you need to consider when trying to decide if solar panels are worth it in Illinois.
- What Are the Solar Incentives in Illinois?
- What’s the Payback Period?
- How Much Money Can I Save Overtime?
- Additional Solar Benefits
Let’s look at each of these things to determine a more precise cost estimation for solar panel installation in Illinois.
What Are the Solar Incentives in Illinois?
Illinois solar rebates and tax incentives are indisputable assets to get the cost of your system down. Ultimately, solar rebates and incentives allow you to reduce your cost significantly.
What rebates and incentives do you have available as an Illinois resident? Let’s take a look.
The Federal Investment Tax Credit (ITC)
The Federal Investment Tax Credit (ITC) is perhaps one of the most beneficial cost-saving options you have for getting solar installed on your Illinois home. Essentially, the ITC allows homeowners to deduct a percentage of their solar installation costs from their federal taxes.
The original act, The Energy Policy Act of 2005, was initially set to expire back in 2007. However, the deadline has been extended time and time again. Now, it’s continuing through 2021.
The amount you can deduct from your total has decreased over time. However, it’s still a worthy amount. In 2021, Illinois homeowners can deduct 22% of their solar installation costs from their federal taxes.
(There is currently no federal tax incentive for residential customers after 2021 because the act has not been renewed beyond 2021.)
Solar Renewable Energy Credit (SREC)
Illinois’s Solar Renewable Energy Credit program rewards homeowners for making the switch to solar. This is also called The Adjustable Block Program or “Illinois Shines.” The way this program works is that you’re given one solar renewable energy credit for every MWh of electricity your solar panels produce.
You can sell these credits at 7.1 cents per kWh. There’s also a grant option, where the money is paid upfront towards your solar installation. However, to participate in this program, you have to sign over your SREC rights to an approved vendor. (Please note: This program is completely full and is now operating on a waitlist only).
Property Tax Break
Even though having solar panels does increase your property value, you don’t have to worry about paying higher taxes. That’s right. With Illinois’s solar property tax break, you won’t be penalized for adding value to your home with solar panels.
Illinois Net Metering
Illinois has a generous net metering program. If your solar system produces extra energy, you can sell it back to your energy company for additional compensation. Different electric companies offer different values for net metering. Commonwealth Edison (ComEd) provides the top net metering program in the state.
ComEd Commercial Solar Rebates
ComEd is the largest electricity provider in the state, providing electricity to 70% of the state. In an effort to do their part to help the solar energy revolution, they offer rebates for commercial solar installations. While that won’t necessarily help you with your residential solar installation, it’s still important to keep an eye on all the solar incentives alive in the state of Illinois.
What’s the Payback Period?
After taking into consideration the total cost minus the incentives and rebates, an Illinois homeowner can expect to pay back their entire solar system in roughly 8.55 years. So, in 8.55 years, the solar panels are completely paid off.
Any money saved in electricity costs (or earned through net metering) is all bonus after the payback period. So, how much money can you save over time?
How Much Money Can I Save Overtime?
When you take these costs and incentives into consideration, the real question becomes, “How much money can I save over time?”
All things considered, the average Illinois resident who installs solar panels on their roof will save $22,219 over 20 years in energy savings.
Of course, this is just an average, so let’s break down and take a look at how a standard solar purchase of a 5-kW system might look after incentives and savings.
Let’s put the starting price in the middle of the average price points at $15,450.
The Federal ITC allows you to take $3,399 off that price, for a total of $12,051.
With a payment period of 8.55 years, you’re looking at saving roughly $1,409.47 every single year on electricity, or around $117.46 per month. All of which can go towards recouping your initial investment.
After the payoff period, all those savings go straight to you. After the payback period, you have at least 11.45 years to soak up savings from your system. which amounts to $16,138.43 minimum in electricity savings.
That’s $16,138.43 that goes straight to whatever you want to use it for. Many solar panels last up to 30 years, which means that saving shoots up even more – to a whopping $30,233.13 in energy savings.
If those savings aren’t enough to help you decide whether solar energy is a worthy investment, let’s look at some of the other benefits of swapping to solar power in Illinois.
Additional Solar Benefits
Aside from saving consumers thousands of dollars on electricity costs, solar energy presents tons of other benefits.
Solar energy is a sustainable and renewable energy method. In other words, it’s better for the environment than conventional alternatives. Solar energy uses the power of the sun and doesn’t require the emission of carbon gasses. So, you can do your part to make the planet a cleaner and safer place to live.
Solar energy is a low-maintenance option that increases property value and home equity. Additionally, solar panels can be used to charge your electric vehicle if you have one, eliminating the cost of EV charger installation.
Moreover, solar energy increases energy independence for the United States. And, if you install a solar battery, you can increase your personal energy independence, too. Whether you’re grid-tied or off-the-grid, having solar energy and solar panels eliminate your dependence on conventional energy streams.
These are just some of the top solar energy benefits for Illinois residents, which all make the answer to the question at hand much easier to answer.
With all the knowledge above, you should be able to determine whether getting rooftop solar in Illinois is the right move for you. The average solar installation costs between $13,132 to $17,768 in total before rebates and incentives.
Residents in the state of Illinois can enjoy several solar rebates and incentives, including:
- The Federal Investment Tax Credit (ITC)
- Solar Renewable Energy Credit (SREC)
- Property Tax Break
- Illinois Net Metering
- ComEd Commercial Solar Rebates
Average residential customers can expect to pay back their entire purchase in approximately 8.55 years (after rebates and average monthly savings). The average solar panel customer in the state of Illinois will save around $22,219 in 20 years in electricity costs.
What could you do with an extra $22k? And remember, these are all just averages. You could experience much more savings. If the upfront cost has you hesitant, not to fret. There are many options available to fund your initial purchase, including loans, upfront purchase, PPAs, and more. Don’t let the upfront costs stop you from cashing in on these unbelievable benefits.
So, is solar energy worth it in Illinois? You tell us!