Illinois Communities Preparing for Solar

Illinois’s Future Energy Jobs Act (FEJA) will be the premier legislation to drive renewable energy and economic development in the state of Illinois. Many communities, townships, school districts, colleges, and building owners are gearing up for this legislation.

Along with energy efficiency improvements, this legislation calls for 1.3 GW of wind and 3 GW of solar by 2030. About 1500 MW of solar needs to be built by 2021 and of this approximately 670 MW is distributed generation. The Illinois Power Agency has issued the Renewable Energy Procurement Plan.

The intent of this blog post is to summarize the new “Adjustable Block Program” program.

In a market where energy prices are cheap, the primary mechanism to incentivize these projects is via Renewable Energy Certificates (RECs). One REC is equivalent to 1 MWh and it’s the “clean energy” attribute of generating renewable energy. These certificates will be set according to the “Adjustable Block Program” for community solar and behind the meter projects.

Depending on the size of the project and the utility company whose territory the project lies in, the Illinois Power Agency will grant REC values to incentivize these projects. There are separate blocks for community solar and those for distributed generation (DG), which consists of commercial, industrial, and residential.

On the community solar side, based on IPAs draft procurement plan, these REC values may range from just above $100/REC to just under $50/REC. Similarly on the DG side, these REC values may range from close to $80/REC to $30/REC, depending on size and the block.

IPA has issued the first three blocks and the REC values in these blocks will reduce over time. Hence it is important to get in early. These REC values will be paid at an accelerated level of 100% up front for residential solar and within five years for commercial and community solar projects. All incentives along with the federal investment tax credit and accelerated depreciation are expected to defray the upfront cost of doing solar.

On the net meter side, community solar will be net metered at wholesale electricity rates while commercial and residential will be compensated at retail electricity rates. Therefore, depending on the situation, commercial and industrial clients will benefit from “behind the meter” applications since they will earn retail rates for excess electricity sold back to the grid. Residents that cannot or do not want to put solar on their dwellings will benefit from subscribing to a community solar garden.

Overall, the program will boost solar for all communities, while enabling job creation and economic development. Companies that are early movers can reap the rewards of this opportunity while helping local communities in Illinois.

Amit Shukla is a veteran of renewable energy and sustainability with more than 20 years of experience. He has MBA and BS degrees in both engineering and science. He has broad experience in renewable energy and energy efficiency, sustainability, biobased chemicals, and water. He has worked for startups, utilities, engineering consulting firms, government, and renewable energy companies. He has been a professor of Renewable Energy at New Mexico State University and Triton College where he designed, developed, and launched Renewable Energy Technology AAS programs. Currently, Amit is working as the vice president of business development for IPS-Solar, a leading solar development and construction company in the Midwest. He leads solar growth for his company in Illinois and is based in Naperville.  He can be reached via email at amit@ips-solar.com or phone at (952) 239-5896. His company website is www.ips-solar.com .

Comments are closed.