The residential clean energy credit expired on December 31, 2025. Here is what changed, what Illinois still pays, and how to redo your numbers honestly.
If you have been researching solar for a while, almost everything you have read is now out of date in one important respect. The federal residential clean energy credit — the "30% solar tax credit" that anchored every payback calculation for years — applied to systems placed in service through December 31, 2025. It did not step down to 26%. There was no transition period. It went to zero.
That is a genuinely large change, and a surprising number of solar websites have not updated for it. This post covers what actually applies now if you are a homeowner in Naperville or the surrounding DuPage and Will County communities.
What exactly expired
The credit in question is Section 25D of the tax code, the residential clean energy credit. It let a homeowner who bought a system claim 30% of the total installed cost against their federal tax bill. On a $25,000 installation that was roughly $7,500.
For a system you buy with cash or a loan in 2026, that credit no longer exists. If a quote or a calculator is still subtracting 30% from your cost, it is overstating your return by thousands of dollars — and you should ask the company that produced it to show you the current rule in writing.
One exception worth knowing
Leases and power purchase agreements are treated as business investments. The business credit under Section 48E remains available through 2027, but it is claimed by the company that owns the equipment, not by you. A competitive provider should reflect part of that value in your monthly rate.
What Illinois still pays — and why it got slightly better
Illinois is unusual in having a state-level incentive substantial enough to carry real weight on its own. Illinois Shines, formally the Adjustable Block Program, buys the renewable energy credits your system generates. One credit equals one megawatt-hour of production, and the program pays for roughly 15 years of expected generation.
Crucially, this is a payment rather than a tax credit. You do not need tax liability to benefit from it, which makes it more accessible than the federal credit ever was for retirees and lower-income households.
For the 2026–27 program year, residential systems up to 10 kW earn roughly $70 per credit, with systems between 10 and 25 kW earning slightly less per credit. Payment is typically structured as about half in the first year after installation, with the remainder spread quarterly over about six years.
- A 7.5 kW system in northern Illinois generates roughly 9 megawatt-hours a year — about 135 credits across the 15-year term.
- That works out to somewhere in the region of $9,000 to $12,000 for a typical home, depending on production and program values.
- Systems of 25 kW or less that are customer-owned and are not claiming a federal credit can qualify for an additional per-credit adder, introduced largely to soften the federal credit’s expiry.
The honest effect on payback
Removing roughly $7,500 from a $25,000 project and replacing part of it with Illinois Shines does not leave you where you started. Payback periods have lengthened. Where a well-sited Illinois system might have paid back in seven to nine years under the old rules, ten to fourteen is a more realistic planning range now for many homes.
That is not a reason to dismiss solar — rising utility rates push in the other direction, and ComEd rates hit a ten-year high in 2026 — but it is a reason to insist on a quote modelled on your actual usage rather than a regional average. If a company will not show you the production assumptions behind its savings figure, that is informative in itself.
What to do next
We keep a full breakdown of current Illinois incentives, including how net metering differs between Naperville’s municipal utility and ComEd territory, on our incentives page.
- Recalculate. Any payback figure written before 2026 assumes a credit that no longer exists.
- Ask every installer directly: who receives the Illinois Shines REC payments, you or them? This is worth thousands and is often buried.
- Compare price per watt across quotes rather than total price, so system size differences do not confuse the comparison.
- If you are considering a lease or PPA, price it against buying — the ownership route keeps the REC payments, which is now a bigger share of the total return.
General information, not tax or financial advice. Incentive programs and utility rules change — confirm current terms with your installer and the relevant program before making a decision. See our 2026 Illinois incentives breakdown for the current figures.