Solar & Battery Regulation & Incentive Programs
Note: In December 2016, Illinois enacted S.B. 2814, which made several major changes to energy policy including changes to the renewable portfolio standard.
Note: In June 2014, Illinois enacted H.B. 2427, which released $30 million in the Renewable Energy Resources Fund to the Illinois Power Agency for the purchase of photovoltaic (PV) power through a supplemental procurement process. Of the released funds, half are set aside for PV systems less than 25 kilowatts in nameplate capacity, such as residential rooftop systems.
The IPA's proposed procurement plan for 2016 can be found in Docket 15-0541 and on the IPA website.
The Illinois Power Agency Act, enacted August 2007, requires large investor-owned electric utilities (EUs) and alternative retail electric supplies (ARES) to source 25% of eligible retail electricity sales from renewable energy by 2025. Electric cooperatives and municipal utilities are exempt from renewable portfolio standard (RPS) requirements.
Illinois Power Agency
The Act also created a new state government agency, the Illinois Power Agency (IPA), to develop electricity procurement plans for large investor-owned electric utilities (EUs) and broker all contracts between utilities and suppliers to ensure “adequate, reliable, affordable, efficient, and environmentally sustainable electric service at the lowest total cost.” The only EUs that are subject to the IPA procurement process are ComEd and the Ameren Corporation companies (AmerenCILCO, AmerenIPL, and AmerenCIPCO). (MidAmerican elected to have the IPA procure power and energy for a portion of its Illinois jurisdictional load beginning in the 2016-2017 Planning Year, but it is under no obligation to have power or energy procured by the IPA in future years.)
H.B. 1865, enacted in August 2011, allows multi-jurisdictional utilities with less than 100,000 Illinois customers to request a procurement plan from the IPA. Such utilities will be subject to the renewable portfolio standard (RPS) requirements.
Eligible Technologies
Eligible renewable energy technologies include wind, solar thermal, solar photovoltaics (PV), dedicated crops grown for energy production, untreated and unadulterated organic waste biomass, trees and tree waste, in-state landfill gas, biodiesel, hydropower that does not involve the construction of new dams or significant expansion of existing dams,"other such alternative sources of environmentally preferable energy," which may include (among other resources) waste heat from industrial processes and anaerobic digestion. Several means of energy production are specifically excluded from standard eligibility: the incineration of tires; garbage; general household, institutional and commercial waste; industrial or office waste; railroad ties; utility poles; landscape waste other than trees and tree waste; and construction or demolition debris other than untreated and unadulterated waste wood.
In order for a system to qualify under the distributed generation requirements specified below, systems must be 2 MW or less; powered by wind, solar thermal, PV, biodiesel, biomass, tree waste, or hydropower; interconnected at the distribution system level; and is located on the customer side of the customer’s electric meter and is primarily used to offset that customer’s electricity load.
Requirements
EUs and ARES are required to source 10% of eligible retail electricity sales from renewable energy by 2015 and 25% by 2025 and each year thereafter, with annual escalations through 2025. The term "EY" refers to the compliance period or “energy year” for the standard, which runs from June - May and is defined by the year in which an energy year ends.
EUs
The annual requirements for EUs are specified in full in Table 1 below. There are several "carve-outs" for specific technologies:
Resources must be procured from facilities located in Illinois or states that adjoin Illinois. If resources are not available in Illinois or in states that adjoin Illinois, then they may be procured elsewhere.
Table 1: RPS schedule for EUs*
| Energy Year | Overall Standard (% of Retail Electric Sales to Come from Renewables) | Solar Requirement (% of the Standard) | % of Retails Electric Sales from Solar | Wind Requirement (2017-2026 wind + photovoltaic) (% of the Standard) | % of Retail Electric Sales from Wind | Distributed Generation Requirement (% of the Standard) | % of Retail Electric Sales from Distributed Generation |
|---|---|---|---|---|---|---|---|
| EY 2009 | 2% | -- | -- | 75% | 1.50% | - | - |
| EY 2010 | 4% | -- | -- | 75% | 3.00% | - | - |
| EY 2011 | 5% | -- | -- | 75% | 3.75% | - | - |
| EY 2012 | 6% | -- | -- | 75% | 4.50% | - | - |
| EY 2013 | 7% | 0.5% | 0.0035% | 75% | 5.25% | - | - |
| EY 2014 | 8% | 1.50% | 0.120% | 75% | 6.00% | 0.5% | 0.04% |
| EY 2015 | 9% | 3% | 0.270% | 75% | 6.75% | 0.75% | 0.0675% |
| EY 2016 | 10% | 6% | 0.600% | 75% | 7.50% | 1% | 0.1% |
| EY 2017 | 11.5% | 6% | 0.690% | 75% | 8.625% | 1% | 0.115% |
| EY 2018 | 13% | 6% | 0.780% | 75% | 9.75% | 1% | 0.13% |
| EY 2019 | 14.5% | 6% | 0.870% | 75% | 10.875% | 1% | 0.145% |
| EY 2020 | 16% | 6% | 0.960% | 75% | 12.00% | 1% | 0.16% |
| EY 2021 | 17.5% | 6% | 1.05% | 75% | 13.125% | 1% | 0.175% |
| EY 2022 | 19% | 6% | 1.14% | 75% | 14.25% | 1% | 0.19% |
| EY 2023 | 20.5% | 6% | 1.23% | 75% | 15.375% | 1% | 0.205% |
| EY 2024 | 22% | 6% | 1.32% | 75% | 16.50% | 1% | 0.22% |
| EY 2025 | 23.5% | 6% | 1.41% | 75% | 17.625% | 1% | 0.235% |
| EY 2026 | 25% | 6% | 1.50% | 75% | 18.75% | 1% | 0.25% |
Alternative retail electric suppliers
The annual requirements for EUs are specified in full in Table 1 below. A minimum of 60% of the renewable energy requirement must come from wind power, 6% from solar power beginning EY 2016, and the remaining amount (34%) can come from any eligible renewable energy technology.
Table 2: RPS schedule for ARES
| Energy Year | Overall Standard (% of Retail Electric Sales to Come from Renewables) | Solar Requirement (% of the Standard) | % of Retails Electric Sales from Solar | Wind Requirement (2017-2026 wind + photovoltaic) (% of the Standard) | % of Retail Electric Sales from Wind |
|---|---|---|---|---|---|
| EY 2009 | -- | -- | -- | -- | -- |
| EY 2010 | 4% | -- | -- | 60% | 2.40% |
| EY 2011 | 5% | -- | -- | 60% | 3.00% |
| EY 2012 | 6% | -- | -- | 60% | 3.60% |
| EY 2013 | 7% | -- | -- | 60% | 4.20% |
| EY 2014 | 8% | -- | -- | 60% | 4.80 % |
| EY 2015 | 9% | -- | -- | 60% | 5.40% |
| EY 2016 | 10% | 6% | 0.60% | 60% | 6.00% |
| EY 2017 | 11.5% | 6% | 0.690% | 60% | 6.90% |
| EY 2018 | 13% | 6% | 0.780% | 60% | 7.80% |
| EY 2019 | 14.5% | 6% | 0.870% | 60% | 8.70% |
| EY 2020 | 16% | 6% | 0.960% | 60% | 9.60% |
| EY 2021 | 17.5% | 6% | 1.05% | 60% | 10.50% |
| EY 2022 | 19% | 6% | 1.14% | 60% | 11.40% |
| EY 2023 | 20.5% | 6% | 1.23% | 60% | 12.30% |
| EY 2024 | 22% | 6% | 1.32% | 60% | 13.20% |
| EY 2025 | 23.5% | 6% | 1.41% | 60% | 14.10% |
| EY 2026 | 25% | 6% | 1.50% | 60% | 15.00% |
Process
The IPA plans and administers the competitive procurement processes that result in bilateral agreements between the utilities and wholesale electric suppliers. The IPA issues a Request for Proposals after the Illinois Commerce Commission (ICC) approves the IPA's procurement plan. The procurement plans must include procurement of cost-effective renewable energy resources to meet annual requirements. The IPA and a third-party consultant "Procurement Administrator" analyze and select winning bids, and an independent monitor oversees the process.
The IPA's first procurement plan, for the June 1, 2009, to May 31, 2010, period, is available in ICC Docket 08-0519. The 2018 Electricity Procurement Plan, the most recent, is available here.
For more information on IPA Request for Proposals, click here.
Compliance
The IPA procures renewable energy to satisfy the requirements of EUs.
The renewable obligation for ARES is measured as a percentage of the actual amount of metered electricity (megawatt-hours) supplied by the ARES in the compliance year, as reported for that year to the ICC. ARES must meet at least 50% of their renewable energy obligation through alternative compliance payments (ACPs). The price of ACPs is calculated by averaging the REC prices in the most recent IPA REC procurement; each ARES's ACP is different, based on the utility service territory in which it operates. The remaining 50% of an ARES's obligation may be met with ACP payments or by procuring renewable energy or renewable energy credits (RECs). The ACPs submitted by ARES is remitted directly to the ICC, which forwards that money to the IPA's Renewable Energy Resources Fund (RERF) to be used for the purchase of RECs. For more information, see the ICC website "Renewable Portfolio Standards For ARES."
According to S.B. 2841 passed in 2016, for the delivery years beginning June 1, 2017 and June 1, 2018, an alternative retail electric supplier need not make any alternative compliance payment to meet any portion of its compliance obligation. Starting from June 2017, all alternative compliance payments by alternative retail electric suppliers shall be remitted to the applicable electric utility.
REC Verification
The PJM Environmental System Generation Attribute Tracking System (PJM-GATS) or the Midwest Renewable Energy Tracking System (M-RETS) are used to independently verify the quantity and source of renewable energy resources procured.
Cost Mitigation Measures
Renewable energy procurement is limited to “cost-effective” resources. The increase in cost to retail customers from meeting the RPS in cannot exceed $0.0018054 per kilowatt-hour (kWh) for Ameren and $0.0018917 per kWh for ComEd. The cost of procuring renewable resources also must not exceed benchmarks based on market prices for renewable energy resources in the region, where the IPA procurement administrator will determine the benchmarks.
* With regard to distributed generation requirements, the table presents one possible interpretation of the language in S.B. 1652. An alternative interpretation could be that each of the individual resource tiers (solar, wind, and other renewables) are required to have a 1% distributed generation component.
| Name | Enacted Date | Effective Date | Expired Date |
|---|---|---|---|
| 20 ILCS 3855/1-75 | 08/28/2007 | 08/28/2007 | |
| ICC Order 09-0342 | 07/29/2009 | 07/29/2009 | |
| 83 Ill. Adm. Code, Part 455 | 07/19/2010 | ||
| § 220 ILCS 5/16-115D | 06/01/2009 | ||
| S.B. 2814 | 12/07/2016 | 01/01/2017 | 12/31/2026 |