Over the last 10 years, the Illinois state government has been doing what it can to catch up to leading states like California, Hawaii, Massachusetts and Connecticut’s solar incentives, and finally, the day has come. The government has finally put together a program requiring that a certain amount of total energy usage come from renewable sources. Lucky for you, they’ve finally brought in a financial incentive for homeowners to get on board.
Illinois, home of Superman and Lincoln, has made it possible for you to get onto a path for clean electricity.
With the new program and incentives in place, there is a sweet spot to hit for your solar system size. If you’d like, our geeks and our Solar Recommendation System can find that sweet spot for you.
For solar, the goal is to generate exactly enough power to cover your own electricity needs. If you produce less than your total usage with solar, you have to pay for extra power. If you overproduce, you save less.
Below is a breakdown of the reasons to go solar in Illinois.
Going solar means two things: Generating your power from a clean, renewable energy source AND saving money. This is done through a process called net-metering. Net-metering is the method where your home solar system is connected to your electric meter, which sends the excess energy from the solar panels to the grid when you aren’t using it.
Illinois is based off of an annual net-metering program. Your utility tracks the extra electricity you produce, and you get to use the same amount later. If you produce the same amount of power that you use over the whole year, your electric costs are covered.
Keeping it simple, you need a system that covers your average yearly electricity usage. If you don’t produce all of your electricity from solar, you have to buy the extra power from your utility. If you overproduce, your utility company will treat you like a tiny power plant and pay you at the wholesale rate of power. You pay the retail rate. Not economical.
Locational Marginal Price (LMP)
Locational Marginal Price (LMP) is the cost of supplying the required electricity at a specific location on the electric power grid, considering both supply and demand and the and the cost of delivery itself. This is the cost of power that your utility buys power for from large scale electricity producers.
Let our geeks figure it out for you.Dismiss
The Solar Investment Tax Credit (ITC) was created to help with the cost of getting into clean energy. Started by the federal government, in 2005, and renewed in 2015, this credit covers 30% of the total cost of a Solar energy project, after any available state incentives have been applied.
What does this mean for you? No matter how big or small your system, you can write off nearly a third of the cost through your federal tax return. If you can’t claim it all in one year, no worries! You can write it off over time. No taxes to pay? There are programs to cover the cost for you.
There are now 1.8 million homes with solar in the United States thanks in part to the ITC (In 2018, there has been a new system installed every 100 seconds!). After 2019, the ITC will be set at 26%, and after 2020 it will be 22%. It is unknown whether it will be renewed after 2020.
Illinois has joined the fight to lower pollution. They have committed to generating 25% of all their electricity usage from renewable energy by 2025.
Like a handful of other states, they are using Solar Renewable Energy Credits (SRECs) to achieve this incredible goal.
To put it bluntly, SREC’s make you money. You generate solar power, and polluters must buy the SRECs in order to keep polluting, or pay hefty fines. The part that makes it work for homeowners is that Illinois has set it up to give you ten years of SRECs right away. Up front. This means that the initial cost of the system can be brought down as much as $7500.
These credits have a market value like stocks and shares and their value is dependent on supply and demand and the system size. Systems under 10KW are categorized as small and systems between 10KW and 25KW are large. This categorization determines how you can benefit from the SREC program.
Small systems can take advantage of SREC’s for 15 years and will receive the full value for this term. The prices decline over time in ‘blocks’ as more people in the state adopt solar. You’re looking in to things at the right time!
SREC’s produced by large systems are valued at slightly less than small systems and whilst these are still eligible for 15 years, utility companies will instead purchase the rights to these SREC’s over a 4 year period.