Navigating Solar Tax Incentives

Commercial Solar Incentives for Illinois & Missouri: A 2025–2026 Guide

How solar incentives help your business

For farms, car dealerships, schools, manufacturers, and commercial service providers, solar incentives can significantly reduce upfront costs, shorten payback periods, and improve long-term energy savings. When combined correctly, federal and state incentives can offset a substantial portion of your commercial solar project’s cost. This makes solar not just sustainable, but financially strategic.

The key is timing and structure. Some incentives are ongoing, others are changing in 2025–2026, and a few depend on program capacity or compliance rules. On this page we’ll break down what’s available now, what continues into 2026, and what’s changing or expiring, so you can plan with confidence.

Incentive Status for 2026 at a Glance

Continuing into 2026

• Federal Clean Electricity Tax Credits (45Y / 48E) for qualifying wind and solar projects that begin construction by July 4, 2026.
• Direct Pay (Elective Pay) for eligible tax-exempt entities (including many schools and public organizations).
• Federal tax credit transferability for taxable businesses.
• USDA REAP grants and loan guarantees for farms and rural small businesses.
• Illinois Shines REC contracts (subject to category capacity and block availability).
• Accelerated depreciation (MACRS) for commercial solar assets.
• Missouri net metering for eligible systems up to 100 kW.

Changing in 2025–2026 (planning matters)

• Beginning-of-construction rules are stricter for federal tax credits, with less reliance on the traditional 5% “safe harbor.”
• Foreign Entity of Concern (FEOC) restrictions affect equipment sourcing and documentation for projects beginning construction after 2025.
• Illinois energy storage incentives are expanding and restructuring under new state legislation.

Not applicable or capacity-limited

• Residential-only incentives do not apply to commercial projects.
• Some state and utility programs are capacity-based and may pause or fill.

Federal Solar Incentives (Illinois & Missouri)

Clean Electricity Investment & Production Tax Credits (48E / 45Y)

What they do:

These federal credits reward businesses for producing clean electricity from solar. Most commercial projects use the Investment Tax Credit (48E), which is based on project cost, while some may benefit from the Production Tax Credit (45Y).

Status in 2026:

• Available for qualifying projects that begin construction by July 4, 2026.
• Credits are technology-neutral and apply to projects placed in service after 2024.

What’s changing:

• Projects must clearly demonstrate that construction has begun using the Physical Work Test.
• Projects must maintain progress toward completion (continuity requirements).

Why this matters:

Waiting too long to start can mean losing eligibility for one of the most valuable solar incentives.

Direct Pay and Tax Credit Transferability

• Direct Pay: Allows certain tax-exempt entities (like schools or local governments) to receive the value of the credit as a payment.
• Transferability: Allows taxable businesses to sell eligible tax credits to other taxpayers.

Both options continue into 2026 and expand access to federal incentives beyond traditional tax equity structures.

USDA REAP (Farms & Rural Businesses)

USDA’s Rural Energy for America Program (REAP) offers grants and loan guarantees for eligible agricultural producers and rural small businesses installing solar.

Status: Active with funding windows covering FY 2025–2026.

Accelerated Depreciation (MACRS)

Most commercial solar systems qualify for accelerated depreciation, allowing your business to recover system costs faster. Bonus depreciation rules were revised again in 2025, potentially increasing first-year deductions for eligible projects.

Illinois Commercial Solar Incentives

Illinois Shines (Adjustable Block Program)

Illinois Shines provides long-term REC (Renewable Energy Credit) contracts that pay businesses for the clean energy their solar systems produce.

Status in 2026:

• Active for Program Year 2025–26.
• Availability depends on system type and remaining capacity in each program block.

Important note: Illinois Shines is capacity-managed, and enrollment timing can affect eligibility.

Illinois Energy Storage Incentives (CRGA)

Illinois’ Clean and Reliable Grid Affordability Act (CRGA) expands incentives for commercial battery storage, including systems paired with solar.

Important clarification:

The former Smart Inverter Rebate is not continuing as a separate program in 2026. It has been replaced and modernized under CRGA, using the same statutory authority, with updated per‑kW storage rebates and new grid‑participation requirements.

What’s new:

• Updated per-kW rebates for behind-the-meter and front-of-the-meter storage.
• New participation requirements tied to grid-support and future Virtual Power Plant (VPP) programs.
• Expanded net-metering eligibility for certain stand-alone storage systems.

These incentives make solar + storage increasingly attractive for demand management and resilience.

Missouri Commercial Solar Incentives

Net metering (systems up to 100 kW)

Missouri law requires utilities to offer net metering for eligible renewable energy systems up to 100 kW—covering many small commercial and agricultural installations.

Status in 2026: Net metering remains available for qualifying systems.

For larger projects: Systems above 100 kW are typically evaluated through utility interconnection studies and rate structures rather than traditional net metering. Project economics depend heavily on utility-specific rules.

See What Incentives Your Business Qualifies For

EFS Energy designs and builds solar + storage projects for Illinois and Missouri businesses—farms, car dealerships, schools, manufacturers, and service providers. Our team helps you:

• Identify the best incentive stack for your ownership and tax situation.
• Keep projects compliant with changing federal rules (beginning-of-construction, documentation, supply chain).
• Navigate state programs like Illinois Shines and utility interconnection processes.

Why Choose EFS Energy

Solar incentives are powerful—but only if they’re applied correctly. EFS Energy turns complex rules, deadlines, and compliance requirements into clear, actionable savings for your business.

With EFS Energy, you get:

• A customized incentive roadmap tied to your site, usage, and business goals.
• Clear guidance on federal tax credits, depreciation, and 2025–2026 eligibility changes.
• Deep experience with Illinois Shines, CRGA storage incentives, and Missouri utility processes.
• A long-term partner who stays ahead of policy changes, so you don’t have to.

Take the Next Step with EFS Energy

Contact us today to talk with an EFS Energy consultant and see how much your business could save with solar. We’ll evaluate your site, identify the best incentive stack, and show you exactly how solar can work for your operation.

Resources for Further Reading

Citizens Utility Board
“Solar and Storage Rebates in Illinois”
Illinois Shines Program

 U.S. National Archives
“Notice of Funding Opportunity for the Rural Energy for America Program for Fiscal Years 2025, 2026, and 2027”

BDO.com
“One Big Beautiful Bill Act Expands 100% Depreciation Expensing Opportunities”