If you’re considering whether going solar is a worthwhile financial move for your home, there are essentially two factors that you should look at: 1) the costs associated with solar power, and 2) the rates you pay for electricity from your utility. Going solar makes economic sense when solar electricity costs less than grid electricity.
The best states to go solar aren’t always the sunniest; those who benefit the most from installing a solar PV system for their home spend a lot in electricity and live in a state with good solar incentives.
Illinois may not have the year-round sunshine of the Southwest, but it does have a great solar market because of the available financial incentives. In addition to the 30 percent federal solar tax credit for solar system owners, Illinois residents can receive additional financial benefits through the state’s solar renewable energy certificate (SREC) market.
The United States has experienced dramatic solar growth over the past decade and it can be attributed to a number of factors. The state of Illinois has seen a 64% decline in the cost of an installed solar system over the past 5 years with price drops even more significant in populated areas like its famous windy city, Chicago. Chicago is seeing some of the most significant solar growth by any city in the nation and this article we’ll explain why and what you should expect to pay for a solar panel system in 2017.
How much do solar panels cost in Chicago?
As of the first half of 2017, the average price for a solar panel system in Chicago was $3.48 per watt. Thus, since the typical system size in the U.S. is 5 kilowatts (5,000 watts), the average cost of a solar panel system in Chicago is $17,421 before any rebates or incentives.
Though this price may already look attractive, it’s missing a major incentive that bolsters the economics of solar in the U.S.: the federal tax credit for solar energy systems. The solar ITC signifies a huge price reduction thanks to a hefty 30% rebate offered to both residential and commercial markets. Check out this data table that shows the cost of solar at different system sizes with the ITC factored in:
Chicago solar pricing table: average system cost and net savings
|System size||Average solar system cost|
*Note – prices in this table have the 30% Federal solar subsidy already included
The above table shows the discounted price for a solar panel system in Chicago after the solar ITC is included. The data draws from real quotes submitted to homeowners on the EnergySage Solar Marketplace between the second half of 2016 and first half of 2017. Keeping in mind the typical system size for a U.S. homeowner is 5 kilowatts (5,000 watts), a solar panel system will cost just over $12,000 in 2017.
Chicago net metering and other solar power incentives
One major reason for the popularity of solar power in Chicago is centered around the great solar incentives in the state of Illinois. Every major state utility offers net metering – a “make or break” factor for the economics of solar.
Net metering is a major benefit for homeowners connected to the grid who have a solar system installed. These homeowners will receive credits on their utility bills whenever their solar panel system sends electricity back to the grid. In a sense, net metering allows you to use the grid to “store” your energy for free – when your solar panels are not producing enough electricity, you can use your net metering credits instead of buying electricity from the utility.
This is what makes solar a truly efficient and pragmatic option: with net metering, you can cover 100 percent of your energy needs even during nighttime when your system is not generating energy. Without net metering, most homeowners have to opt for another storage option like a solar battery.
Additionally, Chicago homeowners benefit from the incentive of Solar Renewable Energy Certificates (SRECs). Illinois’ renewable portfolio standard (RPS) now requires the state to source 25 percent of its electricity from renewable resources by 2025. That’s an ambitious goal, and to make it happen, the state has a program that rewards homeowners that help Illinois reach that target. For each megawatt hour (MWh) of electricity your solar system produces, you will be granted one Solar Renewable Energy Credit (SREC) that you can then sell on the market, putting cash in your pocket on top of the savings you’re already generating with solar.
How Chicago homeowners can save big with solar
Though Chicago residents will see some of the cheapest solar prices in the country with continued cost declines expected over the next five years, low prices aren’t necessarily the biggest selling point. When it comes to going solar, the long term ROI and savings from avoided bill payments is often the biggest deciding factor – and the figures can be staggering even in states where utility rates are reasonable. In 2016, solar quotes received by Chicago homeowners yielded 20-year savings estimates of over $15,000 on average. Checkout the breakdown of average net savings by solar system size:
Chicago net 20 year savings from solar
|System size||Average net solar savings over 20 years|
And even though these numbers may be enticing, what isn’t captured in a savings figure is the control you have as a solar shopper on the final quote you’ll receive for your solar energy system, bringing us to our…
Three tips for solar shoppers in Chicago
Homeowners who get multiple quotes save 10% or more
As with any big ticket purchase, shopping for a solar panel installation takes a lot of research and consideration, including a thorough review of the companies in your area. A recent report by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) recommended that consumers compare as many solar options as possible to avoid paying inflated prices offered by the large installers in the solar industry.
To find the best solar contractors in Chicago that typically offer lower prices, you’ll need to use an installer network like EnergySage. You can receive free quotes from vetted installers local to you when you register your property on our Solar Marketplace – homeowners who get 3 or more quotes can expect to save $2,000 or more on their solar panel installation.
The biggest installers typically don’t offer the best price
The bigger isn’t always better mantra is one of the main reasons we strongly encourage homeowners to consider all of their solar options, not just the brands large enough to pay for the most advertising. A recent report by the U.S. government found that large installers are $2,000 to $5,000 more expensive than small solar companies. If you have offers from some of the big installers in solar, make sure you compare those bids with quotes from local installers to ensure you don’t overpay for solar.
Comparing all your equipment options is just as important
National-scale installers don’t just offer higher prices – they also tend to have fewer solar equipment options, which can have a significant impact on your system’s electricity production. By collecting a diverse array of solar bids, you can compare costs and savings based on the different equipment packages available to you.
There are multiple variables to consider when seeking out the best solar panels on the market. While certain panels will have higher efficiency ratings than others, investing in top-of-the-line solar equipment doesn’t always result in higher savings. The only way to find the “sweet spot” for your property is to evaluate quotes with varying equipment and financing offers.
For any Chicago homeowner in the early stage of shopping for solar that would just like a ballpark estimate for an installation, try our Solar Calculator that offers up front cost and long term savings estimates based on your location and roof type. For those looking to get quotes from local contractors today, check out our quote comparison platform.
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