Improvement Valuation of Commercial Solar Energy Systems

If you own a commercial solar energy system that generates electricity for wholesale or retail sale in Illinois (in counties under 3 million people), your property taxes will be calculated using a standardized formula rather than standard property assessment. The formula bases the system's value on $218,000 per megawatt of nameplate capacity (adjusted annually for inflation), then subtracts depreciation allowances. Contact your county assessor or the Illinois Department of Revenue for details on how this affects your specific property tax bill.

Illinois law (Public Act 100-0781) establishes a consistent, formula-based valuation method for commercial solar systems on customer properties, which provides tax predictability and may increase customer interest in grid-scale solar projects. You should be familiar with how the valuation formula works (nameplate capacity–based cost basis minus physical depreciation) when discussing long-term project economics and tax implications with utility-scale or commercial clients in Illinois counties under 3 million people.

Public Act 100-0781 establishes a statutory property tax valuation formula for ground-mounted commercial solar systems in Illinois counties with populations below 3 million. The formula uses a base cost of $218,000 per MW of nameplate capacity (set in 2018 and adjusted annually for Consumer Price Index inflation), from which physical depreciation allowances are subtracted. The Department of Revenue administers the valuation methodology and publishes CPI adjustments and trending factors annually to ensure consistent assessment across counties.