U.S. Secretary of Energy, Jennifer M. Granholm, called it an example of “just what bold state-level action can do to usher in the clean energy future.”

On Wednesday, September 15, Governor of Illinois, J.B. Pritzker, signed into law SB 2408, the Climate and Equitable Jobs Act. After two years since the Adjustable Block Program queue closed to new solar energy installation applications, legislators in the state at last reached an agreement on the future of renewable energy in the state, and the outlook is promising (though opportunities to participate are limited). The bill provides funding mechanisms to take the state from 9% renewable energy (current day levels) to 40% by 2030, by building 3.5 times more renewable energy each year. The bill also sets a target of 50% renewables by 2040. Solar power is expected to make up 55% of renewables deployment in the state.

Governor Pritzker holds up recently signed energy legislation in front of a sunny Chicago skyline, with a crowd of masked onlookers to the left of the image.
Photo credit: Chicago Sun Times

 

The Adjustable Block Program waitlist is ordinal. If you want to start seeing savings in 2022-2024, act now to secure your place closer to the front of the line.

 

What does this mean for potential buyers of renewable energy?

The initial iteration of the Adjustable Block Program (ABP), aka “Illinois Shines,” opened for applications starting Jan 31, 2019. Schools, municipalities, businesses, and other entities that took swift action were able to achieve substantial savings through adopting solar energy. (See below examples.) Unfortunately, the program was oversubscribed at its opening in February 2019. This led to a lottery for those projects that were able to make it into the queue, leaving many potential projects on standby.

ForeFront Power worked with Aisin Illinois to install solar panels on the rooftops of their manufacturing facilities. This represented Aisin Illinois’ first foray into tackling its sustainability goals.

Between that closure up until this bill was signed, opportunities for new installations of renewable energy in the state have been extremely limited.

With the sweeping legislation signed into law in September 2021 that Governor Pritzker referred to as a “giant leap forward” for the state, there is to be at least 100 megawatts (MW) of new solar energy awarded in this block expansion to large consumers of distributed generation. Additionally, there are new incentives for battery storage in the state. (More on this below.)

“Large consumers” are defined as entities that install system sizes between 50 kilowatts (kW) and 5 megawatts (MW). This 5-MW cap has been increased from the former 2-MW cap in the 2019 iteration of the ABP. Schools have their own specific block. (See below for more detail.)

 

 

What types of financial savings could organizations expect from Illinois solar energy incentives?

While the details surrounding this new legislation are still forthcoming from the IPA and utilities in the state, it is suspected that solar energy rates could be as low as $.03-$.04 per kilowatt-hour (kWh) after these incentives. That equates to some of the cheapest electricity in the nation.

 

With these incentives, solar energy rates could end up being as low as $.03-$.04 per kilowatt-hour — among the cheapest in the nation.

 

In 2019, ForeFront Power helped customers take swift action to secure their place in the queue, and the resulting savings achieved have been noteworthy.

The Huntley School District 158, located 30 miles northwest of Chicago, installed 15,100 ground-mounted solar panels as part of a 5.5 MW system. This system is projected to offset 12.3 million pounds of carbon emissions and is estimated to result in several million dollars of utility bill savings over the 20-year contract period. Hear directly from the District Chief Financial Officer, Mark Altmayer, in this video on what this level of savings means for his district.

field of solar panels in front of a red brick high school with sun and dark clouds

Located in Kane County, the Mooseheart Child City & School completed a 2.8 megawatt ground-mounted facility earlier this year, and estimates show the organization saving $2.6 million from the investment. “With the money saved over the next 25 years of the solar project’s life, we’ll be able to reinvest those dollars into other programs in order to better serve our youth,” said executive director of Mooseheart, Gary Urwiler.

In addition to ground-mounted solar systems, ForeFront Power has worked with organizations to install rooftop facilities in Illinois to help achieve financial savings as well.

Note: While the upcoming schools block promises roughly the same savings as it did in 2019, the large distributed generation block can expect incentives to be approximately 4% lower due to newer requirements such as payment of prevailing wage to installers and longer-term revenue payout periods (7 years versus the former 5-year period). With that said, the savings are still quite lucrative for organizations that can take advantage of them.

 

What does this bill mean for energy storage?

For the first time in the state’s history, energy storage at the commercial and industrial scale may pencil following the passage of SB 2408. For the installation of battery storage projects, utilities will be required to offer rebates equaling:

  • $250/kWh of installed capacity for storage paired with distributed generation to customers that are not eligible for net metering
  • $300/kWh of installed capacity to customers that are eligible for net metering

a row of white energy storage containers in a single row outdoorsThat rebate is available at the time the project signs an interconnection agreement with the utility, and the value of the rebate remains for 24 months. If the projects is not energized within 24 months from application, the project can reapply for the rebate at the current value. This rebate will be paid within 60 days of energization of the facility.

Battery storage being viable opens up opportunities for organizations to achieve savings by shaving peak demand. Additionally, it may provide resiliency opportunities through microgrids for organizations looking to protect against power outages resulting from extreme weather such as the polar vortex events seen in recent winters.

ForeFront Power analyzes the battery storage potential for every site where solar is being considered, in order to maximize potential savings and to meet each customer’s unique needs.

 

If your organization is looking to achieve savings starting in 2022-2024, it is advised to ensure your proposed projects get on the waitlist ASAP.

 

 

What are timing considerations?

Illinois Power Agency (IPA) will reopen the Adjustable Block Program within 90 days following the Governor’s signature. This means that by no later than December 14, 2021, entities with a completed application packet will be able to enter the current queue.

This application packet includes several components that a renewables development partner can help your organization put together in an expedited fashion:

  1. Approved interconnection agreement (not to be confused with the application)
    • In order to apply for this agreement, all projects must be proposed and accepted by the IPA. A renewables development partner can help you put together these components.
  2. Proof of site control (ESA or site license)
  3. Non-ministerial permits, such as electrical/building permits
  4. Etc.

The queue in each category (schools, equity, community solar, small distributed generation, large distributed generation, etc.) is ordinal, meaning first-come, first-served. Given the numerous components involved in getting into the ABP queue, we recommend that entities start consulting with a renewables development partner as soon as possible to start seeing savings between 2022 and 2024.

 

What does this mean for schools?

In this bill, the Adjustable Block Program is required to include a special carve-out just for schools. Details are forthcoming from the IPA on exactly what that entails. However, we currently know the following:

  • At least 75 MW will be reserved just for the schools block annually, priced the same as in 2019. These will be applied to the 20-yearr contract paid over the term, and paying a prevailing wage to solar installation personnel is required.
  • Priority to for securing a place in this block will be afforded to environmental justice communities designated as Tier 1 and Tier 2.

solar panels on the rooftop of a school amidst green and colorful leaves in early autumn

Act Now to Secure Your Organization’s Spot in the Queue

Though signing SB 2408 was “two years in the making” and full of “ups and downs, our ins and outs, our twists and turns,” according to State Senate President Don Harmon, this bill puts the state “in a position to lead the nation.” With energy prices as low as $0.03-$0.04 per kilowatt-hour and all kinds of workforce development initiatives related to clean energy investment, leading the nation looks very plausible for the Prairie State indeed.

As mentioned, spots in the current expansion of the Adjustable Block Program are limited, and once they expire, organizations interested in installing renewable energy will be left waiting to achieve the savings an investment in renewable energy can afford.

Questions? Email me, and I’ll get you in touch with our experts.