Illinois passes a new Renewable Portfolio Standard (RPS)

Illinois has a new Renewable Portfolio Standard (RPS) and with it will come greater stability and

predictability for the clean energy sector including solar installers, developers and system

owners. Having originally started as part of the Illinois Clean Jobs Bill until early 2016, when

state legislative leaders requested all energy focused bills in Illinois merge into a single piece of

legislation. The end result is the Future Energy Jobs Bill, a comprehensive energy package,

encompassing many technologies including solar, wind and energy efficiency. The bill also

establishes a new Zero Energy Credit (ZEC) market designed to compensate the Clinton and

Quad Cities failing Exelon nuclear plants for their low carbon emissions in exchange for

commitments to keep them open for 10 years.

This bill will ensure development of every type of solar – residential, commercial & utility scale –

within all public utility service areas, while also ensuring that all ratepayers have fair and easy

access to the solar technology either through direct purchase, community solar subscriptions or

low income solar programs.

As the name implies, the focus is on creating clean jobs – building an industry that will provide

clean energy solutions that result in good paying, long term jobs across Illinois.

The “Solar For All” program includes a job training program for low income communities as well

as a path to employment. This is the first time that a program like this has been included in

legislation in Illinois, and it has dedicated funding to ensure implementation. The solar industry

worked in partnership with environmental justice groups to identify needs and develop

opportunities that will create good jobs while ensuring that solar is deployed in all communities

in all parts of the state. This program exemplifies the “clean energy revolution” and will hopefully

be a model that all states can follow.

Here is a summary of the bill highlights. Implementation will evolve over the next 9 months to a


● Long Term Planning Process: IPA will hold authority and responsibility to write a long

term plan that will be approved by the ICC. 2017 will likely be primarily dedicated to the

development of that plan with stakeholder involvement. Launch potentially late 2017,

early 2018. [Note: Energy Years and IL Calendar Years differ. Energy Year = June 1 to

May 31, Calendar Year = July 1 to June 30.]

○ Technically targets fall to the Utility but implementation falls to the IPA. No

penalties for not hitting goals. There are remedies to allow IPA to adjust plan if

off target.

○ Prior to launch of Long Term Plan, an initial utility scale wind and solar

procurement will launch within 1 year of effective date June 1, 2017. Delivery to

be completed by 2019 (wind) / 2020 (solar) if possible to meet statutory


● Lines Charge: the most vulnerable part of the original RPS was the budget. By shifting

funding from previously complex supplier charges to a single generator lines charge, the

Illinois Power Agency will have a continuous and predictable fund from which they can

execute the Long Term Plan.

● Renewable Resources Budget = $200M/year divided among wind/solar new build


■ By 2020: 650 MW wind / 1,350 MW solar (2M RECs)

■ By 2025: 1,000 MW wind / 2,00 MW solar (3M RECs)

■ By 2030: 1,350 MW wind & 2,700 MW of solar (4M RECs)

○ New solar must be sourced as follows:

■ At least 50% from DG / community solar (25% each)

■ At least 40% from utility-scale

■ At least 2% from brownfield

■ Balance at IPA discretion

○ Creates the Adjustable Block Incentive (ABI)

■ IPA will create a published list of REC prices by category

● <10kW systems

● 10kW – 2MW systems with possible sub-categories

● Community Solar systems

● Brownfield systems

■ IPA has authority to adjust pricing as needed (avoid boom/bust)

■ Residential RECs 15 year contract – full upfront payment

■ Commercial RECs 15 year contract – 20% payable in Year 1, balance

paid over next 4 years

■ IPA to hire 3rd party administrator

■ Eligibility for systems installed after June 1, 2017

● Establishes path toward Community Solar (DG <2MW)

○ Caps single subscription <40%

○ Minimum subscription 200watts

○ Must be located in utility service area

○ Subscriptions portable & Transferable

○ 3 revenue streams:

■ Energy costs (not full retail net metering)

■ RECs from ABI (15 years but not all upfront)

■ $250 rebate/kw installed capacity

● Creates Solar For All Program – unique program to ensure Low-Income access to solar

○ $10M – $20M funding

■ Existing RERF + RPS over 5 years

■ Additional 50% of any unused RPS funds

○ Includes Low-Income Job training & a pathway for job placement

○ Assures funding for Low-Income solar installations

○ Success evaluated and adjusted through IPA long term planning

● Eliminated Demand Charge Proposal from ComEd.

● Net metering details:

○ Rates until 5% cap is hit:

■ Eligible DG Systems will continue to receive full NEM value for lifetime of


■ Eligible DG C&I systems that do not qualify today for NEM will receive a

$250/kW installed rebate payable when energized. (Systems >100kW in

ComEd and >150kW in Ameren). System owners are also eligible for

RECs under ABI as detailed above.

■ Community Solar subscribers will only receive the cost of energy net

metered. Developers are eligible for a $250/kw installed rebate. payable

when energized. System owners are also eligible for RECs under ABI as

detailed above.

○ Once hit 3% capacity: ICC will begin rate study to determine an appropriate

locational rebate for all NEM customers

○ After 5%, IPA will implement ICC rate plan prescribed in study (if study

incomplete, existing plan will remain in place until study is finalized)

■ Tariff to be locationally valued based on grid contributions

■ Residential NEM possibly replaced with Rebate program similar to the

C&I plan newly enacted in this bill. Homeowners will be grandfathered

and can opt out. If the rebate is accepted, a smart inverter will be needed

for compliance as well as utility control provisions

■ C&I and Community Solar rebate amounts which are currently set at $250

per installed KW may change


For additional information regarding the full bill, here is a summary from the Illinois

Environmental Council:


● The clean energy provisions in this bill will lead to between $12 to $15 billion in

additional private investment coming to Illinois and create new jobs—making the Future

Energy Jobs Bill one of the greatest economic development plans Illinois has seen in


● Illinois will one of the top energy efficiency programs in the entire nation, building on the

success of 2007 energy efficiency programs that have led to more than 85,000 jobs

across the state of Illinois. With this new bill in place, we will expand that number


● It is big win for consumers. According to consumer analysis by CUB, due to the

extraordinary benefits of the bill’s energy efficiency programs, each customer in Illinois

would see a $14.80 reduction on their electricity bill each year throughout the lifetime of

the bill. And the bill now has an overall customer rate cap to ensure that rates will not go

up more than 25 cents a month.

● We are especially pleased that this bill will open up opportunities to people in low-income

communities who too often have been shut out of participating in the clean energy

economy. This bill will invest more than $750 million in low-income programs, including

new Illinois Solar for All Program to prioritize new solar development and job training in

economically disadvantaged communities. Specific programs will deliver consumer

savings, economic development and job training and creation for ex-offenders and

former foster children.

Compromise and Bipartisanship

● It is a victory, as well, for bipartisanship and we applaud members on both sides of the

aisle who worked together for the good of their constituents—as well as for the next

generation of Illinoisans who will have a healthier environment thanks to the actions

taken today.

● It is also a victory for the idea that economic and environmental progress can go hand in

hand. With passage of this bill, Illinois has sent an important signal to the rest of the

nation: we can create policies that help consumers’ pocket books, grow private sector

payrolls and protect the planet.

● With uncertainty at the federal level, this also sends a strong signal that states can

continue to lead on issues related to climate and clean jobs.

● As with any compromise, individual coalition members are not pleased with every detail

in this bill; some key priorities were omitted from the final version of the legislation.

However, we have always been united behind the idea that Illinois urgently needs to

modernize its energy to deliver both economic and environmental to the people in every

part of this state. The Future Energy Jobs Bill does that.

● This win is a credit to the diversity and breadth of our coalition. The Clean Jobs

Coalition brought together environmental groups, businesses, faith leaders and

consumer advocates. Just this week, we heard from parents concerned about cleaner

air for their kids, health advocates, scientists and representatives of union workers speak

out in favor of the bill. With a nation that seems more divided and polarized than ever,

this stands out as a reminder that there is a path to victory when people of diverse

backgrounds join together in common cause.

Details of the Bill


● Will make Illinois one of the top states for energy efficiency in the country, lowering bills

for everyone.

● Requires ComEd to achieve 21.5% reduction in energy use by 2030, and requires

Ameren to achieve 16% reduction in energy use by 2030, with a focus on deeper,

longer-lasting savings rather than one-off projects.

● Due to the extraordinary benefits of the bill’s energy efficiency programs, each customer

in Illinois would see a $14.80 reduction on their electricity bill each year throughout the

lifetime of the bill, according to an analysis by consumer watchdog Citizens Utility Board.

● Incentivizes utilities to achieve more energy efficiency savings for customers, with

performance bonuses for exceeding targets, and financial penalties for falling short.

● Requires $25 million per year to be spent on programs to help low-income homes

become more efficient.

● Requires 10% of the overall budget be used to incentivize local governments to save

energy and lower overhead costs.

● Stimulates innovation and entrepreneurship by requiring funding to be set aside for

competitive, third-party-run efficiency programs, other than the utility.

● Expands on-bill financing options to allow homeowners to pay back costs of home

upgrades on the electric bill


● Will restart renewable energy development in Illinois after 5 years of waiting.

● Keeps the existing goal of 25% renewables in Illinois by 2025 and the existing 2% cost

cap on rates that customers have been paying for renewable energy for years, but

redirects that money to go to actually building new projects, rather than buying cheap

credits from projects already paid for by customers in other states.

● More than $200 million per year of the money we spend on electricity will be spent on

building new solar and wind facilities in Illinois, not sent to old, dirty power plants.

● That means, at a minimum, this will lead to 3,000 MW of solar development and 1,300

MW of Wind development right here in Illinois. That’s enough solar and wind to power

almost 1 million homes.

● 50% of the solar projects are required to come from projects on the roofs of homes and

businesses, and in the community. Homes and businesses will be able to more easily

afford to install rooftop solar through an up-front “adjustable block incentive.”

● The bill creates the state’s first Community Solar program, which enables those not able

to build solar on their roof to subscribe to a shared project in their community. That

means those who live in apartment buildings, or can’t install solar on their roof, could

subscribe to a solar project at a local church, school, or business and have the energy

rolled-off their own electric bill.

● Creates the Illinois Solar for All program, a nation-leading, comprehensive low-income

solar deployment and job training program that will open up access to the solar economy

for millions of low-income families.

● Net metering, the policy that lets those with solar offset their electric bills from what they

generate, will continue as is until we deployment hits 5% of the load of the grid (existing

policy). After that, rooftop solar owners will get an up-front value of solar rebate to

account for their geographic, time, and performance-based values to the grid. Those

who get net-metering get to continue net-metering for the life of their system.

● Businesses that do not get full net-metering today will get a new incentive, $250 per kW,

to install rooftop solar, by crediting it for the additional value it provides to the electric

grid. Community solar would also get that incentive.


● As part of this bill, the state will create a new “Zero-Emission Standard” to provide at-risk

nuclear plants payments based on the fact that they do not emit carbon dioxide.

● The payments are limited to nuclear plants that qualify as at-risk, have a cap on the total

number of credits to provide, and a cap on the total program cost of $235 million per

year from the bills we pay for electricity.

● The credit payment is based on the Social Cost of Carbon as developed by the federal

government, but is reduced if the market price for energy goes up.

● The program will last for 10 years. In return, Exelon promised to keep open its two at-risk

nuclear plants: the Clinton plant in central Illinois, and the Quad Cities plant in northwest


● A study commissioned by the grid operator determined that if those two plants were to

close, the need for power would be replaced by coal and natural gas fossil fuel plants,

and that would increase carbon dioxide emissions and other air pollutants in Illinois by

8%, and electric costs by more than $400 million per year.


● Included in the final days of session were rate caps for residential, business and

industrial customers to ensure that rates cannot go up more than 25 cents per month for

ComEd customers, 35 cents for Ameren customers, and 1.3% for business and

industrial customers on average.

● If rates do go up, the Illinois Commerce Commission has to reduce expenses for the

Zero Emission Credits, Energy Efficiency Program, and the Solar Rebates.


● The controversial Fixed Resource Adequacy Plan, or FRAP, that would have provided

hundreds of millions of dollars in market subsidies to downstate coal plants was


● Additionally, so-called “demand rates,” that were designed to change the way customers

were billed for the portion of their bill that paid for the local electric grid, were removed.

Read More from our friends at ISEA and thanks for their efforts.

Gerry Zack2016-12-22T14:49:04-05:00

About the Author: Gerry Zack