Illinois - Energy tax credit, solar rebates and incentives
Illinois Renewable and Solar Energy Incentives
Solar Energy Rebate Program – Department of Commerce and Economic Opportunity (Residential/Commercial)
- DECO grants rebate awards of a maximum of 30% of the overall cost of a renewable energy system.
- Qualifying systems include solar electric, solar thermal and solar water heating units.
- Rebates are capped at $10,000.
- To be eligible, renewable energy units must adhere to all relevant certifications and standards.
Solar Energy Incentive Program (Residential/Commercial)
This program offers aid in the buying and installing of a solar energy system.
- Incentive is equivalent to up to 30% of the overall installation and equipment costs of a solar thermal system.
- Incentives for solar electric systems range from $3.00/watt DC for LEED PV units and $3.25/watt DC for innovative PV units.
Renewable Energy Credit Aggregation Program – Illinois Solar Energy Association (Residential/Commercial)
The Illinois Solar Energy Association will award owners of PV systems that produce electricity with renewable energy credits at a rate of $0.06/kW.
- A net metering contract may be required to establish entitlement to credits.
- To qualify, photovoltaic units must be listed under the Underwriters Laboratory listing or must undergo testing for a full year.
Special Assessment for Solar Energy Systems (Residential/Commercial)
The installation costs of any solar energy systems are completely exempt of property tax.
Sales Tax Exemption for Wind Energy (Commercial)
For businesses that erect new facilities not located in “enterprise zones” may qualify for being designated as “high impact businesses” if they derive energy from wind energy facilities. Under this title, a facility is exempt of state sales tax and all pertinent sales taxes regarding building components.
- Wind energy facility must be considered new and installed no earlier than July 1, 2009.
- Facilities must be 500 kW or greater in size and must produce energy from turbines.
- To qualify for this exemption, applicants must visit the Department of Commerce and Economic Opportunity and request a High Impact Designation form.
Net Metering (Residential/Commercial)
- Customers of investor-owned utility companies are offered net metering options in Illinois.
- Renewable energy systems that qualify for net metering include PV, wind, biomass, hydroelectric, fuel cells utilizing renewable resources, microturbines, and anaerobic digestion.
- Systems must not exceed 40 kW in size to be eligible for net metering.
- Payment is represented in the form of credit on the customer’s next monthly electric bill.
Federal Energy Tax Credit (Residential/Commercial)
Taxpayers are granted a personal tax credit of 30% of the total expenses, which include installation of residential solar-electric systems, solar thermal systems, fuel cells and labor expenses. Residential wind energy installations and geothermal pumps are also subject to a tax exemption.
- Solar electric systems and solar thermal heaters have no maximum incentive.
- If there is excess federal tax credit, it may be carried over to the subsequent taxable year.
- This may continue on through consecutive years until 2016, under which unused credit may or may not be expunged.
Federal Energy Conservation Subsidy Exclusion (Residential)
- Public utilities provide residential purchasers with an exemption of 100% of energy conservation subsidies.
- The overall worth of an installation or renewable utility regardless of the energy conservation capacity, will be excluded from the buyer’s gross income.
- Customers who participate in a utility company’s energy conservation program may be given a reduced rate of electricity utilized or a nonrefundable credit of the price of electricity on the customer’s monthly electric bill.
Energy-Efficient Mortgages (Residential)
With this federal loan program, homeowners may utilize energy-efficient mortgages (EEM) to either supplement or completely fund renewable energy systems.
Example: 4KW System – Residential Installation Cost
Average Electric Bill: $250/mo
Projected Annual Bill Escalation: 5%
Cost Per Watt: $6.50
- Estimated System Cost: $26,000
- Federal/State Tax Credit: $7,800
- State/Utility Rebate: $0
- Net Cost: $18,200
- Cumulative Lifetime Savings (25 Years): $14,826
- Investment Return: 1.6%
Savings of 30% on the total cost of your solar system through incentives