How much do solar panels cost in Chicago, IL and what is the payback period?

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How much do solar panels cost in Chicago IL

 

There's a misconception out there that only homes in the sunniest areas of the country should bother with solar power solutions. This is absolutely false—if a solar panel system depended on continuous sunlight throughout the year, then residents of less-sunny cities (such as Chicago!) would never bother with them. As we'll discuss, a solar system can be a great investment for your home—even for residents of the windy city.

Is Chicago a good city for solar power?

If more sunlight equals a better solar return on investment, then cloudy cities like Chicago aren't well-suited to solar, right?

Not so. Chicago is actually great for solar! In fact, many homes listed on the real estate website Zillow have a SunNumber score above 90, meaning homes in Chicago are quite suitable for solar. A study conducted by Redfin, another top real estate website, ranked Chicago as the second best midwestern city for solar power potential

How much do solar panels cost in Chicago?

According to feedback collected from consumers , we've found that the average cost of installing residential solar panels in Chicago comes out to $2.47/watt.

For a basic 5 kilowatt (kW) residential solar installation, this means your solar system will cost $14,820 before the federal ITC tax credit (which is worth 26% of system cost as of 2020), and $10,966 after the credit is applied.

Of course, the exact costs will depend on the size of system you install, which installer you choose, and any other features (such as batteries or mounts) you may need, but the above data will give you a good baseline to work from.

What kind of rebates and incentives does Chicago offer for solar?

There are three primary rebates that homeowners in Chicago can use to bring down the costs of their solar investment:

  1. Naturally, all Illinois residents qualify for the 26% federal tax credit, also called the ITC
  2. Net metering – Illinois utility companies will buy back excess solar energy you produce when connected to their grid

The amount of money you'll get back with net metering will depend on how much power you generate and the utility company you have, so make sure you keep these options in mind as you research your solar options.

Illinois previously had a solar renewable energy credit (SREC) adjustable block program, however all funds for the program are currently allocated. 

Want more information about your solar investment? Solar Reviews details how much solar panels cost to install in 2021.

How long does it take to pay back my solar investment?

This is the question on many consumers' minds - "If I install solar panels in the interest of bringing down my energy bills, how long will it take to pay off and start enjoying the benefits of lower electricity usage?"

First, let's note that the payback period refers to the amount of time it will take your solar investment to pay for itself in saved energy costs. The average payback period for solar systems in the U.S. is six to eight years.

The length of your payback period will depend on how big your solar system is, the rebates and incentives available to you, and how much you're currently paying for your utilities.

Let's look at the numbers for a 5 kW systen in Chicago

  • The basic system will cost $14,820
  • After applying the 26% federal tax credit, the cost goes down to $10,966
  • The average electric rate in Chicago is about 11 cents per kWh

Altogether, the value of net metering and the tax credit will bring your solar payback period to about 10 years. If the Adjustable Block SREC program reopens, this could drop down to as little as four years. 

Note that these numbers are just a rough estimate for payback period and don’t take panel degradation and electric price changes into account. For a detailed quote that takes your exact home specifications into account, use our solar calculator.

Are there other benefits to installing solar panels in Chicago?

Aside from helping support the environment and the state's goals of moving to renewable energy, solar panels can actually improve your home's resale value.

Research into how solar investments affect home resale value found that homes increased in value by $3,780 for every kW of solar panels. Not bad when you consider all the other benefits!

Overall, Chicago is a great place for solar investments, and homeowners who get on board early will reap the full benefits of government-sponsored rebates. Do your research and find an installer you trust before committing to a vendor.

For more information on how much solar panels cost in cities around the U.S., Solar Reviews has your city here.

Additional Resources

 - Author of Solar Reviews

Andrew Sendy

Home Solar Journalist

Andy is deeply concerned about climate change but is also concerned about cost of living pressures on American families. He advocates for solar energy and solar battery storage only to the extent that they make financial sense for homeowners. He is not affiliated with any particular solar company in the United States.

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