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Add State and Local Incentives to the 30% Federal Tax Credit
Learn about solar incentives and solar rebates. Find out what is available to you through federal, state and local programs, as well as local utilities.
State and Local Solar Panel Rebates
Combining the Federal tax credit with state incentives you qualify for may significantly reduce the cost of your solar PV system.

Read more good news about these programs and important tips on qualifying below.
Federal Solar Tax Credit
30% of the cost of your Solar Electric System and installation can be deducted from your federal tax bill.

Read more about this credit and what qualifies.





Solar Incentives by State… Click on your state to see what is available.    
Solar States


— You may be able to afford a larger solar PV system than you originally thought!
— You may be able to add the battery backup system you were planning to buy in a year or two



The Good News About Solar System Incentives, Qualifications and Tips
Some solar incentive programs pay you back over time, based on the energy you generate. Other solar incentives are one-time payments of rebates or credits. Incentive requirements and definitions may vary between states.

Incentive types can be specifically for residential, schools, business, or industrial; or inclusive of all of them. Solar incentives are mainly for grid tied systems and are sometimes available for off grid systems.

The incentives may be only for solar photovoltaic (electric), for electricity generated by wind, or for solar thermal (hot water generation). Other types of incentives may incorporate multiple solar technologies.

Programs with yearly or periodic application dates have credits or rebate rates that may be stepped down over time.

To qualify for incentives, your solar system may have to be installed by a licensed Photovoltaic System Installer, and/or connected to the grid by a licensed Electrician. This may be particularly true for Grid-Tie (Grid-Intertied) systems.
Plan ahead and act quickly. Many incentive programs are time sensitive. First-come-first-served programs, such as lotteries, can be spoken for in minutes after the opening of their application date.

Be careful including incentives in your PV system's budget due to requirements and possible deadlines to meet before qualifying.

Always consult a tax professional in regards to your eligibility for tax incentives.





Solar Incentive Glossary
Battery Backup Systems
Battery backup systems can store electricity from the grid or a fuel-powered generator to provide emergency power when the grid goes down. It can also store energy created PV system to power appliances and lights at night after the sun goes down.

Feed in Tariffs,
a Performance Based Incentive, or PBI

(Available for Grid Tied Systems.)
Feed-in Tariffs are typically long term contracts with your local utility for performance-based compensation.

The contracts are typically a 15-25 year purchase agreement at a guaranteed rate. The rate may decrease over time as specified in the agreement. Feed-in Tariffs may ultimately pay for your PV system or even exceed your initial investment depending on the specifics in the contract.

Originally started in Germany in 1990 and restructured in 2000 to include the right to interconnect to the utility grid. It was designed as an incentive to promote cost-effective renewable energy use and advancements in technologies. Due to its success, the current German policy is the cornerstone for the creation of many feed-in tariff programs around the globe.

Green Building Programs
(May be available for Off-grid and/or Grid-tied Systems.)
Green Building Programs are generally for new construction and remodeling, or just adding a solar electric system. The most common incentives are reductions or waivers of building permit fees. Some state or local organizations offer coupons that reduce construction and/or installation costs to homeowners. The home or business owner usually gives the coupon to their program-authorized installer/contractor. Once the system is installed the installer/contractor can be reimbursed for the amount of the coupon by the program's organization.

Grid-Tied PV Systems
Grid tied systems are inter-connected to send energy back to the grid when your solar electric system creates more than you're using; and you can receive energy from the grid when you're using more electricity than your system is generating at the moment. Learn more about grid-tied solar systems.

Loans
(May be available for Off-grid and/or Grid-tied Systems.)
State or local governments may offer low or zero interest loans for renewable energy projects. Terms are typically 10 years or less. If you are going to purchase or remodel a home that you are going to add a solar system to you may also want to see the Energy Star website for information on Energy Improvement Mortgages (EIMs).

Property-Assessed Clean Energy (PACE) financing may be offered by states that have been authorized to participate in this program. The amount of the loan is determined by a special assessment of your property and is typically repaid over a period of years.

Check with your local banks and credit unions as they may offer renewable energy loans for less than the prime rate. Also consider that mortgage loans and home equity loans can offer several advantages: longer terms, lower interest rates than conventional bank loans, and tax-deductible interest.
Net Metering
(Available for Grid Tied Systems.)
As of January 2012, only four states do not have net metering policies ‐ South Dakota, Mississippi, Alabama and Tennessee. These programs are for utility customers who generate their own electricity and feed excess energy back into the grid. Net-metered customers may use grid energy when their electrical demand exceeds their solar electric system's output. Solar electric credit rates are applied to the customer's total electric use and are shown on the utility bills.

The credit rates and rules vary from state to state. Unused solar electric system credits may expire in a specified time period or they may be carried over from year to year. The credits may only be applied to the utility bill or you may be allowed to get a refund check at the end of a designated period, usually the end of the year.

Off-Grid PV Systems
Off grid systems do not feed energy back to the grid. You may be completely independent from the grid or you may be receiving grid electricity to supplement your system (Grid-Assisted). Learn more about off-grid solar systems.

Solar PV System (Photovoltaics)
A solar PV system uses photovoltaic panels (or modules) to create electricity. This powers appliances, lights, and other electric equipment.

Solar Thermal System
A solar thermal system uses panels (or modules) to heat water. The hot water is typically used instead of a water heater for everyday water use, or in a radiant heating system to warm the air.

State and Local Tax Incentives
(May be available for Off-grid and/or Grid-tied Systems.)
  • Personal tax incentives include income tax credits (dollar-for-dollar reduction on what you owe) and income tax deductions (reduces your taxable income).
  • Property tax exemptions, exclusions and credit incentives generally exclude the added value of the system from your yearly property tax. Abatements may reduce a percentage of your yearly property tax over time.
  • State sales tax incentives can be an exemption from or a credit towards the applicable sales tax.
Utility Rate Discounts & Rebates
(Available for Grid Tied Systems.)
Some utilities and state or local programs may offer temporarily reduced rates on utility bills, or one time rebates on the installation of solar systems and purchases of energy efficient appliances and/or HVAC systems.


Updated: 09/24/2016
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Illinois Solar Incentives
Updated: 09/24/2016
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INCENTIVE NAME: Special Assessment for Solar Energy Systems
CATEGORY: Financial Incentive
TYPE: Property Tax Incentive
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: IL01F
DETAILS:
Incentive Amount - Varies
Maximum Incentive - None specified
Eligible System Size - None specified
Equipment Requirements - None specified
LAST UPDATE: 12/17/2015

INCENTIVE NAME: Illinois Clean Energy Community Foundation Grants
CATEGORY: Financial Incentive
TYPE: Grant Program
SECTOR: Non-Profit
TECHNOLOGY: Solar Photovoltaics,
CODE: IL06F
DETAILS:
Incentive Amount - Varies, typically on a case-by-case basis
Solar Thermal: The lessor of $100/sq. ft. and 60% of project costs
K-12 Wind Schools Program: the lessor of $40,000 and 90% of the system and installation costs
K-12 Solar Schools Program: the lessor of $7,000 or 90% the system and installation costs
Maximum Incentive - Varies

WEBSITE: http://www.illinoiscleanenergy.org/how-to-apply/
LAST UPDATE: 12/17/2015

INCENTIVE NAME: City of Chicago - Green Power Purchasing
CATEGORY: Regulatory Policy
TYPE: Green Power Purchasing
SECTOR: Local
TECHNOLOGY: Solar Photovoltaics,
CODE: IL05R
DETAILS:
Renewables % or Amount - 20%
Source - Renewables
WEBSITE: http://www.chicagoclimateaction.org/pages/renewable_energy_sources/13.php
LAST UPDATE: 07/21/2015

INCENTIVE NAME: Renewable Energy Resources Trust Fund
CATEGORY: Regulatory Policy
TYPE: Public Benefits Fund
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: IL01R
DETAILS:
Types - Renewable energy
Total Fund - Approximately $100 million for renewables (1998-2015)
Charge - $0.05 per month per residential electric service and residential gas service
$0.50 per month for small nonresidential electric and gas service
$37.50 per month for large nonresidential electric and gas service
(50% of all charges support the RERTF)
LAST UPDATE: 07/21/2015

INCENTIVE NAME: Renewable Portfolio Standard
CATEGORY: Regulatory Policy
TYPE: Renewables Portfolio Standard
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: IL04R
DETAILS:
Standard - 25% by compliance year 2025 - 2026
Technology Minimum - Wind (IOUs): 75% of annual requirement (18.75% of sales in compliance year 2025-2026)
Wind (ARES): 60% of annual requirement (15% of sales in compliance year 2025-2026)
PV (All): 6% of annual requirement in compliance year 2015-2016 and thereafter (1.5% of total sales in compliance year 2025-2026)
Distributed Generation (IOUs): 1% of annual requirement in compliance year 2015-2016 and thereafter (0.25% of sales in compliance year 2025-2026)
Compliance Multipliers - N/A
REC Lifetime - Not specified
Credit Trading/Tracking System - Yes (M-RETS, PJM-GATS)
Alternative Compliance Payment - Yes
WEBSITE: http://www.icc.illinois.gov/electricity/
LAST UPDATE: 11/17/2015

INCENTIVE NAME: Solar and Wind Energy Rebate Program
CATEGORY: Financial Incentive
TYPE: Rebate Program
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
SOURCE: Illinois Renewable Energy Resources Trust Fund
CODE: IL05F
DETAILS:
Incentive Amount - Residential PV: $1.50/watt or 25% of project costs
Commercial PV: $1.25/watt or 25% of project costs
Nonprofits and Public Sector PV: $2.50/watt or 40% of project costs
Residential and Commercial Wind (SWCC certified): $1.75/watt or 30% of project costs
Nonprofits and Public Sector Wind (SWCC certified): $2.60/watt or 40% of project costs
Wind energy systems that are not SWCC certified: $1.00/watt
Residential and Commercial Solar Thermal: 30% of eligible project costs
Nonprofits and Public Sector Solar Thermal: 40% of eligible project costs

Maximum Incentive - Residential: $10,000
Commercial: $20,000
Nonprofits and Public Sector: $30,000

Eligible System Size - PV systems: Rated design capacity of at least 1 kW;
Solar thermal systems: Designed to produce at least 0.5 therms or 50,000 Btus per day or contain at least 60 sq. ft. of collectors
Wind: Name-plate capacity 1-100 kW
Equipment Requirements - PV systems must be UL-listed or have completed at least one year of field testing
Solar thermal systems must be approved by the SRCC or a comparable organization
Small wind systems: no specific equipment requirements listed
Installation Requirements - Small wind systems: Must be mounted on a tower at least 60 ft in height, 30 ft above any natural features or structures within 300 feet of installation, on a parcel of land 1 acre or greater, and must be installed in location suitable for wind generation. Other wind turbines not meeting these criteria may be considered at the Department's discretion and depending on funding.
Ownership of Renewable Energy Credits - Remains with customer/producer
BUDGET: $2.5 million
WEBSITE: http://www.illinois.gov/dceo/whyillinois/KeyIndustries/Energy/Pages/01-RERP.aspx
UTILITIES: Commonwealth Edison Co, Ameren Illinois Company,
LAST UPDATE: 03/26/2015

INCENTIVE NAME: City of Chicago - Green Building Permit Programs
CATEGORY: Financial Incentive
TYPE: Green Building Incentive
SECTOR: Local
TECHNOLOGY: Solar Photovoltaics,
CODE: IL22F
DETAILS:
Permit Fee Waiver / Reduction - 50% of Building Permit Fee amount up to $25,000. Varies by project type and sector.
Expedited Permitting Process - Goal is less than 30 business days. Varies by project type and sector.
Density Bonus - Not applicable
WEBSITE: http://www.cityofchicago.org/city/en/depts/bldgs/provdrs/green_permit.html
LAST UPDATE: 12/17/2015

INCENTIVE NAME: Net Metering
CATEGORY: Regulatory Policy
TYPE: Net Metering
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: IL13R
DETAILS:
Applicable Utilities - Investor-owned utilities, alternative retail electric suppliers
System Capacity Limit - 2 MW
Aggregate Capacity Limit - 5% of utility's peak demand in previous year
Net Excess Generation - Non-competitive customers: Credited to customer's next bill as a kWh credit at the retail rate; granted to utility at end of a 12-month billing cycle
Competitive customers: Credited to customer's next bill as a kWh credit at electricity provider's avoided cost of electricity supply over the monthly period
Ownership of Renewable Energy Credits - Customer owns RECs
Meter Aggregation - Electricity providers must "consider whether to allow meter aggregation"
WEBSITE: https://www.icc.illinois.gov/electricity/
LAST UPDATE: 12/01/2015

INCENTIVE NAME: Interconnection Standards
CATEGORY: Regulatory Policy
TYPE: Interconnection
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: IL15R
DETAILS:
Applicable Utilities - Investor-owned utilities
System Capacity Limit - No limit specified
Standard Agreement - Yes
Insurance Requirements - Vary by system size and/or type; levels established by PSC
External Disconnect Switch - Required
Net Metering Required - No
LAST UPDATE: 07/13/2015

INCENTIVE NAME: Energy Efficiency in State Government
CATEGORY: Regulatory Policy
TYPE: Energy Standards for Public Buildings
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: IL16R
WEBSITE: http://www.illinois.gov/dceo/whyillinois/KeyIndustries/Energy/Pages/EnergyEfficiency.aspx
LAST UPDATE: 07/09/2015

INCENTIVE NAME: City of Chicago - Small Business Improvement Fund
CATEGORY: Financial Incentive
TYPE: Grant Program
SECTOR: Local
TECHNOLOGY: Solar Photovoltaics,
CODE: IL40F
DETAILS:
Incentive Amount - 25%, 50%, or 75% of the costs, depending on size of the applicant. The typical average grant amount is $40,000.
Maximum Incentive - Industrial property: $150,000
Single owner/tenant commercial property or landlord: $100,000
Multi-tenant building: $250,000 per property, $50,000 per tenant/landlord
Equipment Requirements - See program website for eligible equipment
Installation Requirements - Must be located in a Tax Increment Financing District (TIF)
WEBSITE: http://www.somercor.com/sbif/
LAST UPDATE: 12/17/2015

INCENTIVE NAME: Renewable Energy and Energy Efficiency Project Financing
CATEGORY: Financial Incentive
TYPE: Bond Program
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: IL46F
DETAILS:
Incentive Amount - Varies by project
WEBSITE: http://www.il-fa.com/programs/energy
LAST UPDATE: 03/25/2015

INCENTIVE NAME: Statewide Renewable Energy Setback Standards
CATEGORY: Regulatory Policy
TYPE: Solar/Wind Permitting Standards
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: IL17R
LAST UPDATE: 07/21/2015

INCENTIVE NAME: Green Energy Loans
CATEGORY: Financial Incentive
TYPE: Loan Program
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: IL63F
DETAILS:
Maximum Loan - Rate reduction for up to 5 years of the loan
Loan Term - Rate reduction available during first 2 years of the bank loan, with possible three additional year extension
WEBSITE: http://www.treasurer.il.gov/
LAST UPDATE: 07/21/2015

INCENTIVE NAME: Solar and Wind Rights
CATEGORY: Regulatory Policy
TYPE: Solar/Wind Access Policy
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: IL18R
LAST UPDATE: 07/09/2015

INCENTIVE NAME: Large Distributed Solar and Wind Grant Program
CATEGORY: Financial Incentive
TYPE: Grant Program
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
SOURCE: Renewable Energy Resources Trust Fund
CODE: IL73F
DETAILS:
Incentive Amount - Business Solar Thermal: 30% of project costs
Government and Nonprofit Solar Thermal: 40% of project costs
Business PV: $1.25/watt or 25% of project costs
Government and Nonprofit PV: $2.50/watt or 40% of project costs
Business Wind: $1.75/watt or 40% of project costs
Government and Nonprofit Wind: $2.60/watt or 40% of project costs
Maximum Incentive - $250,000
Equipment Requirements - PV, Solar Thermal, and Wind systems minimum cost: $100,000
Solar Thermal: Must be SRCC rated or equivalent
PV: Must be UL-listed or field tested
Wind: Must have site assessment
WEBSITE: http://www.illinois.gov/dceo/whyillinois/KeyIndustries/Energy/Pages/01aCommunitySolar.aspx
LAST UPDATE: 12/11/2015

INCENTIVE NAME: City Water Light and Power - Solar Rewards Program
CATEGORY: Financial Incentive
TYPE: Rebate Program
SECTOR: Utility
TECHNOLOGY: Solar Photovoltaics,
CODE: IL77F
DETAILS:
Incentive Amount - $500/kW
Maximum Incentive - $2,500 per household and $5,000 per business
Eligible System Size - 0.5 kW to 25 kW
WEBSITE: http://www.cwlp.com/eso/rebates/solarrebate.html
UTILITIES: City of Springfield,
LAST UPDATE: 07/21/2015

INCENTIVE NAME: Solar Renewable Energy Credits
CATEGORY: Financial Incentive
TYPE: Solar Renewable Energy Credit Program
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: IL96F
DETAILS:
Incentive Amount - Negotiated with procurement administrators
Maximum Incentive - Benchmarks set by procurement administrators
Duration - One year for SRECsFive years for DG RECs
WEBSITE: http://www.icc.illinois.gov/electricity/ElectricityProcurement.aspx
LAST UPDATE: 12/03/2015

INCENTIVE NAME: City of Chicago - Solar Express Permit Program
CATEGORY: Regulatory Policy
TYPE: Solar/Wind Permitting Standards
SECTOR: Local
TECHNOLOGY: Solar Photovoltaics,
SOURCE: U.S. Department of Energy SunShot Initiaive
CODE: IL23R
WEBSITE: http://www.cityofchicago.org/city/en/progs/env/solar_in_chicago.html
LAST UPDATE: 12/03/2015

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