Illinois Has Some of the Best Solar Incentives in the Country
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 through Solar Renewable Energy Credits (SRECs). These payments are on top of a longstanding federal tax credit (30%).
What is an SREC?
An SREC is a tradable, environmental asset that represents the clean attributes of solar electricity. One Illinois SREC represents the renewable attributes of one megawatt-hour of electricity generated by a solar system (1 SREC = 1,000 kWh). This opportunity is different than a net metering agreement with the utility where system owners are credited for excess generation. SRECs are a way to track and monetize solar’s environmental benefits and compensate owners for the countless benefits to Illinois. SRECs are valued for the total energy production from an array and therefore represents the carbon or pollution avoided from the grid.
Do you own rental properties?
The homeowner does not necessarily need their name on the utility bill to collect the SRECs. The SRECs typically belong to the owner of the property and the owner of the solar system. As long as the homeowner owns the solar system and does not sign the SRECs away to their installer or Approved Vendor then they will own the SRECs associated with the system.
How do incentives work for homeowners?
Power companies must purchase these SRECs from homeowners on terms dictated by the Illinois Power Agency (IPA), a unit of the 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. 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. The IPA sets the prices for Illinois SRECs and your Solar Consultant will review the current price for residential systems during your in-home consultation. Typically will result in an estimated additional 30% system savings, which would be on top of Fed ITC.