How can Evanstonians go solar?

A few Saturdays back, a door-to-door salesman came by my house and suggested installing solar panels, mentioning numerous government credits that have recently become available.

I am usually suspect of anyone going door-to-door and sent the man away before the pitch got too involved. I did, however, become curious about panel installation, specifically what benefits are now available for Evanstonians, and what consumers have to look for to make sure they’re getting a good deal. 

Jim Chilsen, an Evanston resident who is communications director for Citizens Utilities Board (CUB), said that the vendors who came to my house were likely offering free installation on leased solar panels.

“That may be the right deal for some people, but for others it may not turn out to be such a good deal,” Chilsen said.

The catch in this case is that, while the panel installation would be paid for, the firm that does the installing gets to utilize the substantial tax credits and incentives that ultimately make installation financially worthwhile for consumers.   

“You need to run the numbers,” said Chilsen. “…Most deals eventually have a deal to let you… own your panels. But that likely would come after decades – usually about 20 years. The leasing company may increase your monthly rate over time. You should always read the fine print to see if there is any type of provision that would allow the leasing company to increase that rate over time.”

Solar panel installation indeed comes with a large up-front cost. According to the Center for Sustainable Energy, the average residential system in the U.S. costs about $15,000 to $25,000 prior to the application of tax credits and incentives. The federal government allows an income tax credit for 30% of those installation costs, for example, while Illinois residents who own solar power installations are credited for the excess power their home creates – in effect, they are selling that energy back to utilities.

Both these perks can help pay off up to 60% of your installation costs, Chilsen said, adding, “Those are big benefits you are out if the leasing company gets them.”  

The federal Inflation Reduction Act of 2022, signed by President Joseph Biden on Aug. 16, increased the Residential Clean Energy Credit to a 30% tax incentive on the gross cost of a solar project’s installation. 

As an example, were a consumer to spend $20,000 on their solar panels, they’d be entitled to a $6,000 tax credit on their federal income taxes. Should the consumer have a $5,000 liability, the tax credit would cancel it out, and the remaining $1,000 credit would carry over into the following tax year.

To qualify for the credit, consumers must own the system themselves and have a liability. The 30% credit is in place through 2033, when it will be reduced to 26%. In 2034, it is reduced even further to 22%.

The State of Illinois passed the Climate and Equitable Jobs Act a year ago. That legislation jump started some past initiatives that had expired; currently the state offers the Illinois Solar for All (ISFA) and Illinois Shines programs, which allow residents at various income levels to access solar power.

ISFA helps make panels affordable for income-eligible households. Those households are linked with vetted installers who forgo the upfront costs to consumers. One caveat, however: As with leasing arrangements, the installer sees many of the government incentives from the installation rather than ISFA clients. Installers get the federal tax write-off and can be credited financially for the excess energy an ISFA home creates. Those ISFA homes, however, will have lower energy costs and would be spared the instability of a leasing arrangement.

If consumers have the means to pay for or finance a system themselves, the Illinois Shines program lets them see the financial benefits of the solar panels. Solar Renewable Energy Credits (SREC), according to CUB’s website, represent the environmental value of the solar power a home generates. When a home generates more than 1,000 kilowatt-hours of energy, one SREC is created. Under Illinois Shines, that SREC is sold back to utilities; the resulting financial value goes back to the consumer. 

A Community Solar program is another option for homeowners, or even renters, for whom solar power initially seems to be an impossibility. The City of Evanston is partnering with MC-Squared, the Metropolitan Mayors Caucus and energy provider Soltage on a community solar effort.

“There are people who live in apartments, or whose home does not get enough sun –I’m one of them. You can sign up for a community solar offer that gives you the benefits of solar power without having to install panels on your home,” Chilsen said.

Under community solar, consumers subscribe to an offsite solar farm, paying for a portion of the energy that farm produces. The owner of the farm reports that energy production to the subscriber’s energy utility, who in turn returns a credit on the subscriber’s electric bill.

Chilsen also recommended consumers look into Grow Solar Chicagoland, a grassroots residential and commercial group purchasing program wherein residents and business owners band together to secure group discounts on solar installation. 

“It makes it even more cost-effective to buy your solar panels,” he said, noting that the deadline for the 2022 Grow Solar program is Sept. 30. An information session about the program for Evanston residents is scheduled from 6:30 to 7:30 p.m. Sept. 15 at Evanston Public Library, 1703 Orrington Ave.

“If people are looking for a way to capitalize on the good clean energy legislation that has passed, which gives even more benefits to solar customers, this group-buy offer is a really good deal that people should look into,” added Chilsen.

He emphasized that the key to getting into the solar power game is doing research, suggesting homeowners get at least two or three quotes from vendors. Chilsen noted a wealth of choices for consumers and added, “There has never been a better time in U.S. history to install solar panels.”