09/21/2020
Illinois Solar Incentives
Illinois has a law requiring its utilities to source 25% of their energy from renewable sources by 2025. The law requires a significant portion of that energy come from residential solar. To achieve this goal, Illinois’s largest utilities must make incentive payments to homeowners who invest in solar. These payments are on top of a longstanding federal solar tax credit
Introducing Illinois SRECs
The Illinois solar incentive payments utilities make are technically payments for Solar Renewable Energy Credits (or “SRECs”, which is pronounced “ess-wrecks“) your system will generate.
One Illinois SREC represents the renewable attributes of one megawatt-hour of electricity generated by a solar system. Utilities such as ComEd must purchase these SRECs from you on terms dictated by the Illinois Power Agency, a unit of State of Illinois. For most residential systems, they must pay for 15 years of estimated SREC production in advance, when you first install your system.
How Much Are SRECs Worth?
The Illinois Power Agency sets the prices for Illinois SRECs. The price is currently $70.05 per SREC for most residential systems.
The number of SRECs a home solar system will produce over 15 years depends the size of the system (measured in kilowatts), the position of the panels on the home relative to the sun (south-facing is best), shading, and a few other factors.
Here is an example of a fairly typical system:
System size= 8.4 kWdc
Est. production over 15 years = 146 mWh
Est. SRECs produced = 146 SRECs
Price per SREC = $70.05
Total incentive = $10,227
(As stated above, for almost all residential systems this incentive is paid after your system is installed. For very large residential systems these benefits may be paid over four years. SREC Prices Will Decline Over Time
To ensure Illinois solar installers have an incentive to reduce costs, Illinois requires the prices of SRECs to decline as more solar systems are installed. The initial block of systems has already filled, and we are currently in Block 2. While the Illinois Power Agency has set the current SREC price at $70.05, this will only last for the next 5,000-10,000 systems. Once that block of systems has been installed, the price will decline. For each subsequent block of systems, the price will decline further. If you want the largest incentive, you should install your solar system now.
