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Illinois Community Solar Policy Guide for Asset Owners & Developers

Everything you need to know about Illinois’ current community solar legislation, eligibility rules, crediting mechanisms and other important market details, created by Perch’s internal policy team. We help asset owners navigate the growth of community solar in markets across the country, and as new laws are considered and passed, Perch will provide updates and perspective on how it impacts your business.

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Sunny Day in Illinois

1. The Climate and Equitable Jobs Act and implications for community solar in the Adjustable Block Program

The Climate and Equitable Jobs Act (CEJA) was enacted in September of 2021 and is the second major piece of legislation in Illinois impacting community solar in a meaningful way. The first bill, the Future Energy Jobs Act (FEJA) established two major programs: the Adjustable Block Program (ABP), also known as Illinois Shines, and Illinois Solar For All (ILSFA). The new bill, CEJA, essentially updates and expands those programs.

CEJA creates a framework through which Illinois:

  • Sets a goal of 40% clean energy by 2030 and 100% clean energy by 2050
  • Requires the creation of equitable workforce development programs and funding.
  • Expands the community solar category to 250MW in new capacity annually
  • Increases the ILSFA program incentives from $10 million to $70 million annually

There will also be a new third-party Program Administrator, Energy Solutions, to oversee both the ABP and ILSFA replacing the current administrator InClime. Perch is excited for the opportunity to work with the new administrator via newly managed projects, building upon the 6.5 MWs we already manage in the Midwest.

The ABP is a state-administered program for new solar photovoltaic systems which provides payments in exchange for 20 years of Renewable Energy Credits (RECs) for what Illinois refers to as Traditional Community Solar.

  • The ABP has no LMI carveouts but may have some in the future. For now, ILSFA is the program that focuses on increasing renewable energy generation benefits for LMI households and communities.
  • Traditional Community Solar category will generally comprise at least 30% of the ABP capacity.In the current block community solar accounts for 38.16% of total MW capacity.

Each year, Illinois opens the development of new renewable energy resources in “blocks” of Megawatts. The current block is the largest to be opened to date with 250 MWs available for development. The block is further divided into 2 groups based on the major utility’s (Ameren Illinois & ComEd) coverage areas.

  • Group A (includes Ameren Illinois, MidAmerican, Mt Carmel, small co-ops & municipal utilities) is allotted 30% of new generation, so 75 MWs of new generation would be built in that service area which covers the southern three quarters of Illinois.
  • Group B (includes ComEd, small co-ops & municipal utilities) is allotted 70% of new generation, so 175 MWs of new generation would be built in that service area which covers the northern quarter of Illinois including Chicago.

The ILSFA program is an incentive program that supports community solar development to benefit low-income households and communities in Illinois through the purchase of RECs. With the passage of CEJA, the ILSFA program has an increased annual budget of $70 million to support its programs:

  • 40% of Solar for All funds will subsidize LMI customer for community solar participation
  • 35% of funds will go to LMI community solar pilot projects
  • 25% of funds will go to Incentives for non-profits and public facilities
  • It is a goal of this program that at least 25% of the incentives for this program be allocated to projects located in environmental justice communities.

2. Eligibility rules for community solar projects in Illinois

There are a few requirements for Approved Vendors/developers for the current block:

  • Originally eligible for the lottery system
  • No more than 20% of each waitlist can go to a single Approved Vendor
  • Each project must deliver at least 50% of energy benefits to small subscribers

These updates will clear out the waitlist of projects that were chosen on a lottery system from the old FEJA law that has since been scrapped in favor of a first-come, first-serve basis1.

There are also new project requirements outlined in the new bill:

  • Each project has a maximum generation capacity of 5 MWs
  • Community Solar projects must be residential or small commercial customers with subscriptions of 25 kW or less for at least 50% of the facility’s nameplate capacity
  • Projects will feature 20-year REC delivery contracts that pay for RECs over time as they are delivered rather than the front-loaded payment schedule previously used

Subscription requirements:

  • Subscribers must be in the same utility territory as the project
  • Subscriptions must be transferable and portable within the same utility territory
  • No subscriber may own or lease more than 40% of a single project
  • Minimum subscription size: 200 W
  • Utilities must purchase unsubscribed energy at avoided cost rate2
  • Subscription of 90% of nameplate capacity or greater shall be deemed to be fully subscribed.

3. Crediting mechanisms

Community Solar subscribers will get credit on their electric bills at the energy supply rate for each kWh their subscription produces (1 REC = 1000 kWh). This portion of the customers’ bill pays for electricity generation, as opposed to distribution, and usually accounts for about half of the electricity rate paid by residential customers in Illinois.

Additionally, new REC prices are expected to be finalized and approved by the end of August.

Project value comes from three sources:

  • Supply Credit Value
  • DG Rebate (base of $250/kW minimum and $250/kWh for paired storage)
  • REC Value

Rate Classes & Adders:

Rate Classes & Adders table

The Small Subscriber Adder applies to both residential and commercial customers with subscriptions of 25kW or less.

  • The adders for more than 75% small subscribers no longer apply to CS projects selected after February 18, 2020.
  • This 75% small subscriber adder will continue for projects selected prior to that date.
  • February 18, 2020, the maximum adder for projects with 50% or greater small subscribers will be $22.34 for projects in Group A and $21.77 for projects in Group B.

Small Commercial rate classes:

  • Commonwealth Edison: watt-hour delivery class & small load delivery class (Group B)
  • Ameren Illinois: DS-2 (Group A)
  • MidAmerican: GE, GD, GET, GDT, GER, & GDR (Group A)

CEJA effectively creates an option for Universal Consolidated Billing by allowing owners/operators of a CS project to enter into a net crediting agreement with the utility. The utility can charge a net crediting fee to the CS operator at a maximum of 2% of the bill credit value.

  • Net metering billing has transferability between ownership of a valid billing address, customer switching to an ARES or vice versa, including transfer of all banked credits.
  • The tariff for electric utilities shall also provide a streamlined and transparent bill crediting system for net metering to be managed by the electric utilities.
  • Consumer protection requirement that there is a free 14-day contract-cancellation window.

4. Important upcoming dates

The Illinois Commerce Commission is expected to approve the new 2022 Long-Term Renewable Resources Procurement Plan this summer. Perch will relay updates as the ICC and IPA make their final adjustments and approval.

Application Pause from July 1st until August 31st, 2022

  • Allows new PA to set up a new portal with the updated Long-Term Plan program requirements
  • The pause will also allow the IPA time to publish finalized REC prices

Long term plan approval expected on July 19th, 2022 - Approved July 14th, 2022

  • Now approved, the IPA must file a compliance filing within 60 days
  • REC prices will be finalized after the Long-Term Plan’s approval
  • Subject to available capacity, currently open blocks of capacity will remain open until June 30, 2022

November 1, 2022, as the date for the Traditional Community Solar block to open

5. Market details

The Illinois market is split between two major investor-owned utilities: Ameren Illinois and ComEd. The IPA is in the process of details surrounding the dual use potential of agricultural land for CS projects, which would make more parcels available in each utility’s respective service area.

ComEd

  • ComEd provides electricity to 4 million customers or roughly 70% of the state's population.
  • Covers Illinois’ largest city, Chicago, and the northern border areas next to Wisconsin.

Ameren

  • Ameren provides electricity to 1.2 million customers.
  • Covers most of the land area in Illinois, including the metro areas next to St. Louis.
  • Coverage area includes a greater amount of farmland that could be considered for agricultural dual use for CS projects.

6. Appendix

Interconnection resources

  • Final Order on Interconnection Rules from the ICC
  • A signed interconnection agreement (ICA) is not required for projects since it has been determined that it isn’t a useful proxy for project maturity. The ICC maintains the first-come, first-served project selection criteria. If projects are submitted on the same day, the ICC accepts the IPA's proposed scoring process

Coverage map

illinois-utility-coverage-map.jpeg
Source: Illinois Energy Association
Group Category Block 1, Block 2, Block 3 Block 4 Block 5
Group A (Ameren Illinois, MidAmerican, Mt. Carmel Public Utility) Traditional Community Solar Approved Projects submitted before February 13, 2019 - Assigned by lottery Currently not accepting applications Opening November 1, 2022 - First come, first serve
Group B (ComEd) Traditional Community Solar Approved projects submitted before February 13, 2019 - Assigned by lottery Currently not accepting applications Opening November 1, 2022 - First come, first serve

Scroll or swipe the table left to right for more columns.

Other state community solar policy guides from Perch


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