Benefits of Going Solar
The sun in one hour radiates more energy onto earth than the entire human population uses in one year. It is estimated by scientists that the sun, in its current form, is half-way through its life span and has about 5 billion years left. Let’s face it - that is a lot of solar energy!
The advantages of solar are clear. You can save money, raise the value of your home and community, and have greater independence from imported fossil fuels, a brighter, richer and cleaner environment. Most importantly, you can get relief from the volatility of energy prices.
Currently, solar power provides only 2 percent of the power used in the United States. As solar technology improves, the cost of switching to solar energy use will drop. This will help improve our ability to capture and use the sun’s abundant energy.
The International Energy Agency Renewables Report pointed out that solar power has become the fastest-growing energy source – making up about two-thirds of net new energy capacity globally.
This is the first time that solar energy capacity has surpassed any other fuel as a source of power. In the coming years, we all will be using solar power, whether we realize it or not. This also means that the time is right to invest in solar energy for your home.
Solar energy technology is at an all-time best with the most efficient solar cells and panels ever created. Today’s solar panel systems have sleek and practical designs that masterfully blend with your home’s roof. They are also designed to maximize sun exposure. And remember, solar panels produce power even on cloudy days!
More and more property owners, companies, and residential homeowners are seeing the value of solar energy every day! The green energy movement, specifically through solar energy, is in demand and growing by leaps and bounds.
Solar energy provides a viable solution for American’s increasing concern for rising energy prices, and wanting to reduce their carbon footprint. No wonder it’s becoming so popular!
Thanks to technological advances, the cost of solar power has dropped dramatically. Today, solar energy systems require little to no maintenance. Also, Solar Power Midwest (SPM) offers excellent financial plans that include $0 down and 100% financing, making owning a solar energy system more affordable than ever.
Helping The Environment
Using solar energy is a great way to not only save money but also help the environment. A 5-kilowatt solar system can reduce greenhouse gasses by up to 9,000 pounds per year!
Own Your Power
One of the most significant benefits of solar is declaring freedom from the utility company. As we say here at SPM, “start owning your power.” With us, you can!
Increased Costs without Solar
The U.S. energy costs will continue to increase as more homeowners go solar. As more people generate their own electricity, there will be fewer and fewer people paying the utility companies.
How do you think the utilities will pay for the massive costs of maintaining the grid with less revenue?
You are correct, the fewer people paying electricity bills, the utilities will have to pay dramatically higher utility rates to compensate for lost revenue, resulting in higher utility bills.
Homeowners who switch to solar can see an impressive return on investment (ROI) through their electricity bill savings. The average American homeowner with a solar panel system can start seeing an ROI in 6 to 8 years, that’s an annual return of 16.67% to 12.5%, guaranteed from savings on your electric.
Add to the raised value of the home, that payback can be, for example, 4 to 6 years, or 25% to 16.67% ROI. Pretty awesome, wouldn’t you agree?
The truth is, solar panel systems offer greater returns, the longer you have them. They become tax-free returns since they’re savings, not income. The advantage of solar energy is that even when you decide to sell your house, you still are expected to see a return on investment thanks to the increase of your property’s value due to the solar panel installation.
The Solar ITC Credits and Illinois solar incentives, combined with the current process of net metering, make it a perfect time to consider solar. Illinois solar incentives and federal tax credits cover about 45-64% of the purchase price of solar, which helps your ROI payback period and faster ownership of producing your own energy.
State Of Illinois Solar Incentives and Tax Credits
Illinois Solar Incentives in 2020
llinois has a law requiring its utilities to source 25% of its energy from renewable sources by 2025. The law requires a significant portion of that energy to 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
The State of Illinois is incentivizing homeowners with an upfront payment determined by how much energy your system is expected to produce over 15 years. You will receive your payment by check from the state, in up to 4 months after your installation.
The Illinois solar incentive payments utilities make are technical payments for Solar Renewable Energy Credits (SRECs) that 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 (IPA), 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.
The Illinois Power Agency sets the prices for Illinois SRECs. The price is currently $72.97 per SREC for most residential systems with Com Ed (and a few other utilities provides.), and $85.10 for Ameren(and a few other small utility providers).
Note: These SREC’s are only provided in limited amounts, and once used are reduced, and then will expire. Take advantage of your incentives while they are available. The number of SRECs which a home solar system will produce over 15 years depends on the size of the system (measured in kilowatts). The position of the panels on the home is 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 – Ameren Utility = $85.10
Total incentive = $12,424
(As stated above, for almost all residential systems this incentive is paid shortly after your system is installed. For very large residential systems these benefits may be paid over four years).
SREC Prices Will Decline Over Time, And Expire Sooner Than Later
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. While the Illinois Power Agency has estimated the initial SREC price at $72.97 for Come ED, and $85.10 for Ameren.
This will only last for the first 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.
We’ll Do The Math and File your Application
You don’t have to do any of these estimates or calculations. When SPM designs a solar system for you, we will estimate the number of SRECs it will produce and its value. When you decide to move forward with an installation, we make a reservation with the state to ensure you get the payment you expect.
Federal Solar Tax Credit
In addition to the Illinois solar incentive, most homeowners can also benefit from a federal solar tax credit. Section 25D of the Internal Revenue Code for a tax credit equal to 26% of the cost of system installed in 2020:
Unlike the Illinois solar incentives, SPM can and does apply for on your behalf, you must claim the federal incentives on your own tax return. There is one additional form involved: Form 5695: Residential Energy Credits. On line 1 of this form, you enter the cost of your solar system. In our example, this is $25,000.
Note: If your solar federal tax credit is more than you paid in taxes in 1 year, all is good, you will be able to roll it over for up to 5 years!
SPM is not your tax preparer, accountant, or lawyer. However, consult your own advisors about your particular situation. We do not provide you individualized tax advice.
SPM would be more than happy to explain more about both the Illinois solar incentives and federal tax credits. Sign up for a completely free, no-obligation consultation. We will provide a quote for a system for your particular home, calculate the value of the incentives, and clearly explain your financing options.
Net metering helps make you money by storing excess energy that your home produces, typically during less expensive times of the day. It allows you to use them at the same rate during times your systems produce less energy, usually during more expensive usage times.
Net metering costs utility companies’ money, and some utilities have canceled it. Arizona, Nevada, Mississippi, Georgia, Maine don’t have net metering. Hawaii and Indiana have shut it down completely. Act now and be Grandfathered in if your utility decides not to use net metering.
What Is Net Metering?
Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, if a residential customer has a PV system on their roof, it may generate more electricity than the home uses during daylight hours.
If the home is net-metered, the electricity meter will run backward to provide a credit against what electricity is consumed at night or other periods when the home's electricity use exceeds the system's output.
Customers are only billed for their net energy use. On average, only 20-40% of a solar energy system’s output ever goes into the grid, and this exported solar electricity serves nearby customers’ loads.
Net metering allows utility customers to generate their own electricity cleanly and efficiently. During the day, most solar customers produce more electricity than they consume. Net metering also allows them to export that power to the grid and reduce their future electric bills.
Net metering provides substantial economic benefits in terms of jobs, income and investment. Net metering increases demand solar energy, which in turn creates jobs for the installers, electricians, and manufacturers who work in the solar supply chain. Today, the solar industry employs more than 250,000 American workers in large part due to strong state net metering policies, which have allowed the solar industry to thrive.
Unfortunately, some utilities perceive net metering policies as lost revenue opportunities. In fact, net metering policies create a smoother demand curve for electricity and allow utilities to better manage their peak electricity loads.
By encouraging generation near the point of consumption, net metering also reduces the strain on distribution systems and prevents losses in long-distance electricity transmission and distribution. There are a wide variety of cost-benefit studies around the country that demonstrate the value solar provides to local economies and the electricity system as a whole.
Want to support net metering policies in your state? Advocate for solar energy. Your voice counts!