Illinois Solar Incentive Update
2016 has been a growth year for solar in Illinois! Incentive opportunities in Illinois have changed in recent years and will continue to evolve. The intention of this post is to give an update on the current state of solar incentives in Illinois at this time.
Rebates: Many of the 2016 tour host sites benefited from rebates offered by the Illinois Department of Commerce and Economic Opportunity (DCEO). Although this program was extended until 2020, due to the budget situation in Illinois this program is currently unfunded and is likely to remain so for the foreseeable future.
Solar Renewable Energy Certificate (SRECs): New solar purchasers can receive SREC’s* from the Illinois Power Agency’s(IPA) Renewable Energy Credit Program to make their systems more affordable. The value of the SRECs offered in this program has been equal to or greater than the DCEO rebates offered in past years. The primary difference being that the rebate was a one-time cash reimbursement and under the Renewable Energy Credit Program, system owners are paid quarterly over 5 years. Many local installers have secured SRECs from the IPA’s Renewable Energy Credit Program for their prospective customers.
*What is an SREC? A Solar Renewable Energy Certificate is a tool to measure the clean energy attributes that are produced from a solar array. Every 1,000 kWh produced from solar equals 1 REC. System owners are paid for their SRECs, generating an additional revenue stream over and above their energy savings.
SREC Opportunities in 2016
The (IPA) held three procurement auctions in 2015 and 2016 to purchase $30 million of SRECS from new or proposed systems. There were two categories in the auction – one for systems <25kW and one for systems >25kW. The <25kW category allowed solar installers to reserve speculative SRECs in bulk. Installers can “assign” new customers SRECs and registered those customers with a 3rd party aggregator who then handles the contracts with the State.
The last pool of RECs must be “assigned” to customers by December 30, 2016, who will then have 12 months to install their system with a possible 6-month extension if construction is delayed. Pricing for the SRECs was set in a competitive auction so will vary from installer to installer, prospective buyers will need to confirm the actual value with their installer.
SREC Opportunities 2017
Prospective buyers who aren’t ready to commit before December 30th, 2016, will be able to join the 2017 Illinois SREC program. Solar installation companies will once again be able to reserve SRECs for 2017 and 2018 projects. SREC values will vary from installer to the installer and new buyers should ask installers for details when they are ready to shop.