Sweet home, Chicago
Solar Legislator Score: 
Update 2/24/10: One Block Off the Grid has plans to run a group purchasing campaign in Chicago (it’s listed as ‘on the horizon‘). 1BOG’s campaigns typically reduce the cost of going solar by 15-20%. Sign up for the Chicago Solar Campaign here.
Updated 12-30-2009
STATE LEGISLATION
Overall, Illinois is doing a pretty damn good job promoting solar power. The legislature has really encouraged residential and commercial use of renewable energy sources and related technologies. One of the laws recently passed assures the continued funding of the Renewable Energy Trust Fund. So, that fund now provides financial resources for solar and other renewable programs until 12/12/15.
Also, an important new bill went into effect September 24, 2007: Senate Bill 0680 (Public Act 095-0420) established a legal mandate requiring utilities to provide “Net Metering” to customers with renewable energy systems up to 2 MW! For systems with generators up to 40 kW, equipment is paid for by the utility; for larger systems, equipment is paid for by the customer. Provisions of the Act can be found here (There are apparently some ambiguities in this bill that are currently being reviewed by state officials).
In July of 2007, Illinois joined ranks with 24 other states to implement Renewable Portfolio Standards (RPS), and is committed to achieving targets of 10% renewables by 2015 and 25% by 2025. In July of 2009, a new amendment required that a minimum of 6% of the state’s RPS must be met by solar PV beginning in 2015.
STATE INCENTIVE PROGRAMS, UTILITY REBATES, UTILITY LOANS, AND UTILITY INCENTIVES
Illinois offers a Property Tax Exemption to commercial, industrial, and residential sectors for on-site installations of passive solar space heat, solar water heat, photovoltaics, and solar space heat, as well as wind and geothermal electric technologies. The compiled statutes are detailed here.
The Illinois Department of Commerce and Economic Opportunity (DECO) offers a Solar Energy Rebate Program which is available to just about everyone, providing rebates up to 30% of the project cost to a maximum of $50,000. Rebates apply to new solar photovoltaic or solar thermal (hot water) systems. For further details, click here.
In October of 2007, Governor Rod Blagojevich (before he was disposed of) announced over $1.5 million in grants for solar thermal energy systems under The Illinois Department of Commerce and Economic Opportunity “Renewable Energy Resources Solar Thermal Energy Grant Program”. Benefits are available to commercial, industrial, nonprofit, schools, associations, local and state government. Renewable energy projects are covered up to 30% of cost to a maximum of $400,000 (grants are subject to limitations of annual funding). Official grant guidelines and detailed information can be found here.
EXAMPLE RESIDENTIAL SOLAR INSTALLATION
While Chicago is known as “the windy city”, that moniker ain’t attributed to the strong breezes emanating from Lake Michigan. Chicago earned its windy reputation in the 1800’s from politicians who couldn’t seem to keep their mouths shut. Nevertheless, both wind and sunshine prevail in Chicago and surrounding Cook County. A solar rating of “Good”, and several state and federal incentives make solar installations quite attractive here. An example of a Chicago solar installation is described below.
For $120/month electric bill, the installed price of an average 5kW (5000 watt) solar power system would cost approximately $35,000 (at $7/watt, installed) before any grants, rebates, or federal tax credits. Here’s what you get in return:
- A 30% federal tax credit of $7350 (calculated after state rebate is deducted)
- A $10,500 state rebate
- An estimated $25,000 property value increase
- No property tax increase due solar improvement
- 25 years of clean solar power that will generate 59% off your electric needs (assuming your usage stays same), cutting your bill by more than half.
- 8,649 fewer tons per year of CO2 greenhouse gases
Note: The Illinois Solar Energy Association (ISEA) was founded in 1975 to promote widespread use of solar and other renewable/sustainable energy alternatives. For a virtual tour of 89 residential and commercial solar installations throughout the state, check out their website! Lots of useful ideas there!
CONSENSUS
Illinois has implemented a number of forward-thinking programs which encourage the use of solar power and other green energy sources and technologies. There seems to be good momentum here, with a chance that Illinois will be a trendsetter for alternative energy development.
Click here to get hooked up with an Illinois solar installer for your home or business
$360.00 per ton of greenhouse gas, that may be of some help if everyone could afford to do it
Take that same $24,000 (cost of system minus tax refunds/rebates) and invest it at 6.00% for the same 25 years and you would have $107,000 in the bank (assuming no taxes paid on earnings for simplicity). The advantage is that you would have the money to take with you when you sell your house and it wouldn’t depreciate or require periodic maintenance.
Another thought is to invest the $24,000 and use the yearly earning to pay your utilities. At 6%, it would generate $1,480 per year (which would just about cover my annual utility costs).
What many sites fail to include in their savings calculations are the increased property taxes involved. Here in Illinois, there is a 2-year break on this type of investment and the homeowners would then see their home value jump by the $36,000 improvement. Where I live, that would result in an additional $720/year in property tax, which would exceed the savings in utility costs as a result of the PV system. Instead of paying the utility company, I would be paying the county government and local school systems.
If I sold my home and the buyers refused to recognize any value to the solar system, I would basically have to give it to them for free in order to sell the house and I would end up with a total loss of my investment. If I kept the money in the bank earning interest, I could take every penny of it with me when I moved.
Jeff,
I’m hearing a lot from you about why not to go solar. However, your $24,000 banking assumption earning you 6% interest with no taxes for simplicity sake is, well.. a little overly simplistic.
1) You’re gonna be significantly taxed on that “put it in the bank and pay your bills from the interest” scheme.
2) Your property tax will not jump by the $720 a year or $36,000 improvement factor as you mention. In fact, your property taxes will increase by ZERO. When installing solar in Illinois, any reputable installer will alert you to alternative valuation of energy systems on your property: You compare the value of any applicable heating or cooling system already on your property to the value of your new solar energy system. Whatever one is the lesser of the two (99.8% of the time this will be your existing heating or cooling system) is what is used to compute your property taxes.
Not convinced? This is straight from the Illinois tax code and verified via phone today at 10:20am PST:
“Sec. 10-10. Valuation of solar energy systems. When a solar energy system has been installed in improvements on any property, the owner of that property is entitled to claim, by filing with the chief county assessment officer, an alternate valuation of those improvements. When a claim for alternate valuation is filed, the chief county assessment officer shall ascertain the value of the improvements as if equipped with a conventional heating or cooling system and the value of the improvements as equipped with the solar energy system. So long as the solar energy system is used in total or part as the means of utilizing solar energy improvements, the alternate valuation computed as the lesser of the two values ascertained under this paragraph shall be applied.”
3) It ain’t up to the buyers to appraise your home. It’s up to the appraiser. That said, your home value will immediately increase in value by a factor of 20 times the amount of energy you save annually. So in this case, you get an instantaneous return on your investment once you are tied into the grid. When you sell your home, you get all that money to take with you (less capital gains taxes). If you find the same type of ROI in any other type of bank investment nowadays (and god bless you by the way for having faith in one of the banks to actually survive long enough to continue paying your 6% or whatever on your long term CD), we’ll come over to your house and bake you a cake.
4) Scheduled “maintenance” for solar PV systems include hosing the panels off once a year and switching out your inverter after year 15. There are no moving parts.
Cheers,
- Dan
Dan
I do agree with your note (except for the jump in the value of the home by 20 times the annual energy cost saving). I am not sure what is the source of this information – as I have heard 10 times as a more reasonable and commonly used number.
My other request for Jeff is to provide us with additional information on the 25 year 6% guaranteed scheme.
Ciao
Sandip
Sandip,
Thanks for piping in. Check this PDF from the Appraiser Journal confirming home value increases at 15-20 times your annual electricity savings. Granted, appraisers are still figuring standards out for valuation of systems, but consider most solar energy systems produced now are guaranteed to perform at 80% of their peak efficiency at year 25. Therefore, if you install a new system and you sell your home, the new property owner gets all that production. In my estimation, this should be even more than 20x annual savings as you don’t even have to go the step of installing the system any longer and utility prices will be rising at at least 6% year over year.
what credit would a do-it yourself person get.
All of this just makes too much sense to me. I have been in the roofing industry for more than 30yrs. and have been involved with a few PV projects. Unfortunately my experience is limited just to my field.
I am considering installing a system on my residence and wondering what are the drawbacks to makeing this a DIY project?
I will be calling in favors from various professionals so the technical portion shouldn’t be an issue.
Hello,
Can you please tell me if you are aware of any solar panel installation courses available in the Chicago land area? My boyfriend has been a General Contractor for over 15 years and would like install solar panels on his industrial building and become certified in order to offer this service to his clients in the future.
He has attended several workshops but is now interested in formal courses and hands on training. Any information would be greatly appreciated.
Please advise,
Sincerely,
Nelly Rodriguez
I did a solar install in N.Y. about ten months ago on my own home and had an electrician sign off and tie -in invertor. all is great. However, I am now trying to re-finance to a lower rate and term on my mortgage. The appraisor did not give me any value on my system stating that my house is comped to others that do not have a system. Doesn’t every improvement on a home have a value. I paid $350 for an appraisal that is not an accurate value of my home. Do I have an arguement?
Chris,
You definitely have an argument. Take the information from the appraiser’s journal article located above and get a re-appraisal. That system you have on your roof in NY is worth a LOT of $. It needs to be valued as part of your home.
Nelly, this is the only large-scale place, it’s in WI:
http://www.the-mrea.org/course_workshops.php
They are doing some workshops in IL, and the ISEA is moving in this direction, but for now you will need to head north.
One question I have not seen the answer to anywhere has to do with system improvements and obsolescence. I imagine that after 20 years we will be several generations of improvements along in the solar technology, yet you will be stuck with an obsolete system. Even if you lease the system, which is now being offered, there would be removal and installation costs to put the new and improved product in.
Mike,
Solar does not improve as radically as computer chips. There will certainly be improvements, but, for example, we’ve improved solar efficiency from about 8% in the 1970’s to now around 18%. (By efficiency, I mean that 18% of the sunlight that hits solar panels gets converted into electricity.) So, technology has doubled in 40 years, not every 5 years or whatever. Bottom line, if you size your system correctly, you’ll be way ahead of the game financially as well as for the planet. If you keep waiting, it will improve, but not dramatically, and meanwhile, you’ll have lost all of these financial and environmental gains. Hope that answers your question.
Has Illinois approved the rebate for solar installations yet. As of mid August it had not yet been released.
Thank you
Kurt,
As far as we’ve been able to tell, there is no more funding for Illinois solar rebate right now. Please yell at Blago’s successors and see official announcement. 
http://www.commerce.state.il.us/dceo/Bureaus/Energy_Recycling/Energy/Clean+Energy/01-RERP.htm
Solar Energy International in Colorado has a hands-on as well as an on-line component. It’s not cheap.
I will have to say that taking a 1 or 2 day class can set you up to learn the basics.
There is no substitute for a Certified Professional in this or any field.
There are codes and trade specific information that a seasoned veteran will, in the long run, save a lot of time expense and headaches.
Youtube has a couple of “self proclaimed” experts that show you exactly how to install something that will get you in serious trouble down the road.
The groups that give you these 1 or 2 day “workshops”, give you enough info to go to the next, “advanced workshop”.
For a homeowner looking to put up a system and get some knowledge of what’s being put on their roof, that’s o.k.
For someone to do this as a vocation, get some serious training.
Remember, this is electrical work, this can start fires and endanger lives if installed improperly.
This technology is severly underutilized due to a weak marketing strategy by everyone involved.
Most people just assume solar energy is cost prohibitive and only has evironmental value. John and Jane Doe care about the environment, but don’t ask them for a $15-50k (after rebate) donation. With the exception of the “Off-Grid” abodes, I only see Solar Energy adds profiling fine homes, so it must be only for the rich or the different. (No offense different folks).
I’m curious why manufacturers in this industry (Panels, Inverters, etc…) have not invested in a partnership with local colleges to establish professional (Certified) Solar Energy and Solar Thermal Installer training sites in every area.
Illinois, an incentive is only an incentive if you fund it.
K, sry for the rant, but I’m going to have to travel a long distance from Southern Illinois to get the expensive certification training I need to sell this idea (figuratively and literally).
We have engineers and electricians researching design schemes to determine how much affordable solar energy can be made. High priced products ensure enjoyment by the few, but denial by the masses. Researching the cheapest method of delivery is critical. Every citizen is entitled to the benefit of nature’s cheap energy
I am currently a student with the I.B.E.W. and I am learning PV istallation. I am working towards receiving entry level NABCEP certification. I have been part of the unemployed for the last year and a half. I have focused my energies in the renewables markets. It appears to me that the cost of a residential system still remains high in Illinois even after incentives. I understand that Illinois offers net metering, but the buyback rate is low .03 per. kw. Com Ed seems to have control of the situation in the Chicago area. What will have to change in Chicago to create a PV boom?
Very simply, Rob, the rebates have to continue and perhaps a little more federal help. There’s a new clean energy bill on the way in Congress right now. That will be help to Illinois. Plus, it would help if Illinois and Chicago would pass a PACE program.
We are just South of Chicago and are interested in Open Energy SolarSave tiles. We are having a hard time finding installers. Would anyone here know who to contact? We are about 75 miles South of the city.
How much does it cost to install a solar system to heat a 500sqft indoor pool in Chicago?
Is this all a conspiracy. Clean, cheap renewable energy is here, but the utility gangsters, spend our money on keeping residential production out of reach.
I am looking into a possible solar setup for my home in Central Illinois. I am curious as to how much a system would cost, that would be just to help my electric bill. Currently our rates are high and going up. My summer bill is around $180 avg and can be over $400 in the winter a month. Any suggestions?
Does anyone know if there is anyone buying srecs (sp)? for energy generated in Illinois
Great posting site. I’m the Property and Grounds leader at our church and we are looking at installing anywhere from 20 KW to 40 KW of panels on our roof which is perfectly sloped facing south, without obstruction. What kind of incentives are available to non-profits (tax rebates don’t help us, etc..) Church has the money and even something as long as a 15 year payback is not an issue. We’re trying to be a leader in the city, and a green neighbor, so this is one way to start. We pay almost $0.18 / kw for power, and our bill runs about $800 / month. Any help would be appreciated.
What does are the requirements for a foreign UK renewable energy company to set up a solar energy company in Chicago.
Roger
Jeff
Dan Hahn
Sandip Chatterjee
james saw
Henry Marsh
Juan Uribe
Chris
Carter
Mike
Tor a.k.a. "Solar Fred"
kurt
James Sanchez
Dale
Madeline Sanders
ROb
Vickie
claire liu
Tai
john
Joe
Lynn
Wayne
DON