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Currently, everyone is conscious of climate change, especially on its disastrous effects on nature. Because of this, everyone tries their best to do their part in saving the environment. And one of the effective ways in staving off climate change is to make use of solar energy.
Illinois is a state in the U.S. that is actively pursuing solar energy. This is not surprising. The state is known for its farmlands, forests, rolling hills, and wetlands, so with its natural beauty, the people in Illinois want to preserve that. For that reason, the government of Illinois is doing everything in their power to persuade people into installing a solar panel system into their properties.
But if you’re in Illinois and you’re interested in going solar, there is one thing that you need to take into consideration first. And that is the solar installation costs in the state.
How Much Do Solar Panel Installations Cost in Illinois?
Generally speaking, the average cost of a solar panel installation in Illinois ranges from $13,132 to $17,768. If you want to base it on a cost per watt ($/W) basis, a solar panel installation in Illinois can take anywhere from $2.63 to $3.55. According to Energy Sage, as of October 2020, the average solar panel cost in the state is $3.09/W.
You should bear in mind that the estimated costs mentioned above don’t yet include the Federal Investment Tax Credit (ITC) — which is a tax credit that allows a property owner to deduct 26% of the cost of the solar panel system from their taxes — or any other local incentives. Once you account for the ITC and other incentives, the actual costs can drastically reduce.
To give you a better picture of the range of solar panel installation costs in Illinois, here is a table of the estimated average solar panel cost by system size in Illinois.
Estimated Average Solar Panel Cost by System Size
|System Size||System Cost||System Cost (After ITC)|
What Is the Solar Payback Period in Illinois?
Simply put, the solar payback period is the time it takes for the property owner to make back their initial investment in solar energy. For most people who have installed a solar installation in their properties, the solar payback period is about 8.5 years. But in Illinois specifically, the typical solar payback period is around 9.06 years.
What Are the Factors That Affect the Solar Payback Period?
Gross Cost of the Solar Panel System
The gross cost of a solar panel installation is heavily dependent on the size of the system that you select as well as the equipment that makes up that system. In other words, the bigger the system is and the more equipment it has, the bigger the gross cost would be.
Value of Upfront Financial Incentives
When it comes to solar installations, tax breaks, rebates, and other incentives are available for interested customers. And these can tremendously shrink down the overall costs of a solar installation.
As was mentioned earlier, the ITC allows you to deduct 26% of the solar installation cost from your federal taxes. But other than that, there are states in the country that offer many other incentives.
Average Monthly Electricity Use
The amount of electricity that you consume on a monthly basis determines both the size of the solar panel system you need and the amount of electricity that you can offset every month with solar.
This means that if your electricity bills are high, then chances are your estimated payback period will be shorter. This is because you can reduce or even eliminate this electricity bill as soon as your panels are functional.
Estimated Electricity Generation
Ideally, the solar panel system that you install should match your electricity consumption. And though solar installers will try their best to do that, there are constraints that would hinder this from happening. These constraints include the size of your roof and the seasonal weather variation. These factors can impact the amount of electricity that you can produce onsite.
Additional Financial Incentives
In some parts of the country, you might be able to earn additional incentives, such as the solar renewable energy certificates (SRECs) or other utility programs that give you a per kilowatt-hour credit for the electricity that your solar panels produce.
Illinois, in particular, offers SRECs, solar tax breaks, and commercial solar rebates. Additionally, the state also has a net metering policy that allows your utility to buy back any excess electricity that your solar system generates.
How to Pay for Solar in Illinois?
An outright purchase is the first option that you can consider in paying for solar. It used to be the only method, and though right now, there are other options, a cash purchase still allows you to get big financial returns. With lower equipment costs, the ITC, and the Illinois SREC payments, solar costs less than ever before, and a solar installation pays itself off in a few years.
Getting a Loan
The second valid payment method for solar is getting a loan. In fact, getting a loan is actually considered the best option when it comes to percentage return on investment. In Illinois, using a loan to pay for solar is like investing in a business that will succeed. This method also earns you a tax break.
As a result, through this method, you’ll be able to save thousands of dollars, and you’ll also see a spectacular profit over the 25-year life of your solar panel system.
Using a Power Purchase Agreement (PPA)
A Power Purchase Agreement (PPA) is a great way to go solar if you don’t have cash or equity in your home. With a PPA, it is possible to get solar panels with no downpayment and still see big savings over 25 years.
In Illinois, the electricity costs aren’t very high, but since the Illinois sun is enough to make solar power really profitable, solar energy in the state is cheap. This means that a PPA can save you money starting on the first day. And these savings will only get larger over time because as the utility company raises rates, your PPA costs will also go up by a smaller amount.
Illinois is noted for its natural beauty. Its farmlands, rolling hills, wetlands, and forests are truly wonders of nature. Because of this, the government wants to preserve Illinois’ environment. And one way to achieve that goal is by going solar.
As of right now, the solar industry is thriving in Illinois. With low solar panel costs and a variety of solar incentives, now is definitely the right time to go solar in the state. For that reason, if you’re in Illinois and you’re interested in installing a solar system into your home, you should consult solar companies in Illinois to ask for more in-depth information.