Is Chicago a good city for solar power?
If more sunlight equals a better solar ROI, then cloudy cities like Chicago aren’t well-suited to solar, right?
Not so. Chicago is actually great for solar! Real estate website Redfin regularly reviews cities across the U.S. and ranks them based on their potential for solar power. They analyze the local costs of solar installation, number of sunny days each year, and amount of shade on the average rooftop to come up with scores for how suited a city might be for solar investments.
Redfin said Chicago is number two on its list of best midwestern cities with 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 $3.37/watt.
For a basic 5 kilowatt (kW) residential solar installation, this means your solar system will cost $16,850 before the federal ITC tax credit (which is worth 26% of system cost as of 2020), and $12,470 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:
- Naturally, all Illinois residents qualify for the 26 percent federal ITC tax credit.
- The Solar Renewable Energy Credit (SREC) – This system lets homeowners generate credits for every megawatt of solar power they produce. While the exact value of these credits depends on current market conditions, they are an easy way to increase the value of your solar investment over your system’s lifecycle.
- Illinois offers net Metering – Meaning that your utility company will buy back excess energy you produce when connected to their grid.
The amount of money you’ll get back through SREC and through 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.
Want more information about your solar investment? Solar Reviews details how much solar panels cost to install in 2019.
How long does it take to pay back my solar investment?
This is 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?
It depends on a few factors. 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 $16,850;
- After applying the 26 percent federal tax credit, the cost is down to $12,470;
- However, we still need apply the value of your SRECs! If we conservatively assume an average SREC price of $70 (based on market conditions) and a 5kW system generating about five SRECs per year, this will add an additional $350 into your pocket annually;
All together, the value of your SRECs will bring your total payment down by nearly 30 percent—reducing your total payback period to roughly 4 years.
Note that these numbers are just an example of how your payback period can be calculated. 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.