Solar Incentives for Illinois Companies
Lucrative state solar incentives for Illinois companies paired with Federal incentives make Illinois one of the most attractive states for businesses to go solar. Here is a breakdown of available state and Federal solar incentives for large Illinois businesses.
Illinois’ Adjustable Block Program (Solar Renewable Energy Certificates)
Illinois offers a Solar Renewable Energy Certificate (SREC) program. SRECs represents the positive environmental impact attributed to a solar generation project. As solar PV systems produce renewable energy, the system owner earns RECs. These RECs substantiate sustainability marketing claims and can either be kept by the system owner or sold using a market-based system to other entities (companies, local governments, and utilities) wishing to purchase additional RECS to enhance their own sustainability impact.
As a means to expand the use of solar power across the state, the Illinois Power Agency and the Illinois Commerce Commission established the Illinois Adjustable Block Program, which allows PV system owners to sell some or all of their SRECs, thus measurably enhancing the system’s return on investment. State legislation passed in September 2021 paved the way for new distributed generation (solar) projects to be developed, providing hundreds of millions of dollars in guaranteed project subsidies.
ComEd commercial solar rebates
ComEd, one of IL’s largest utility companies, provides rebates for commercial and industrial (C&I) customers to help decrease the out-of-pocket costs of installing solar. If you’re a ComEd customer and install solar on your business, you’re eligible for $250 per kilowatt (kW) of installed solar power. To receive the rebate, your solar panel system cannot be larger than 2,000 kW in capacity. For a business that installs a one-megawatt solar system, this equates to a $250,000 rebate!
The federal solar investment tax credit
Don’t forget about federal solar incentives! With the solar federal investment tax credit (ITC), businesses can reduce the cost of their PV solar energy system by 30 percent. Keep in mind that the ITC applies only to businesses that buy their PV system outright (either with a cash purchase or a solar loan).
Accelerated Depreciation Further Increases Solar ROI
In addition to tax credits, commercial solar owners with tax appetite can benefit from tax deductions, including accelerated and bonus depreciation.
– The Modified Accelerated Cost Recovery System (MACRS) allows solar PV system costs to be recovered for tax purposes over a five-year period through annual deductions.
– Bonus depreciation further accelerates depreciation by allowing businesses to write off a large percentage of the system’s cost in the first year it is operational. Note that bonus depreciation is scheduled to phase out gradually through 2027.
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