In 2007 the Illinois legislature created the Illinois Power Agency (IPA) to oversee the state's newly adopted renewables portfolio standard. That mandate requires utilities (excluding municipal and cooperative providers) to harvest 25 percent of their energy from renewable resources by 2025. Better yet, beginning in 2015, there will be a minimum solar photovoltaic requirement, culminating in at least 1.5 percent of total electricity sales by 2025, which is not as aggressive as wind power requirements but does assure that solar power will get its share of attention from Illinois utilities.
And as recent history shows, if utilities are forced to pay attention to solar power, they'll pay attention to, even entice, solar homeowners. That being said, all of Illinois' solar energy rebates are state-funded and operated, while utility rebates focus on energy efficiency upgrades, such as new furnaces, boilers, (non-solar) water heaters, lighting and appliances. Those state-funded solar rebates and incentives are outlined below:
Production Incentive - Renewable Energy Credit Aggregation Program
The Illinois Solar Energy Association (ISEA) offers an aggregation program for state renewable energy credits (RECs) open to residential homeowners. The program offers an estimated $0.065/kWh for renewable energy credits. However, only whole, 1-megawatt RECs are accepted. For that reason, ISEA, in a partnership with Community Energy, agreed to purchase and bundle the credits. ISEA purchases the RECs and sells them to Community Energy, which then uses them to fulfill demand for the City of Naperville's residential renewable energy program in a second partnership with Naperville's municipal utility.
Only solar photovoltaic (PV) systems are eligible, although small wind and solar thermal may qualify in the future. Systems must be located in Illinois, UL-listed and be legally grid-connected. There is no specified limit on system size although ISEA reserves the right to limit generation volume from any single participant and favors systems less than 10 kilowatts AC. Program budget for 2009 was $15,000, and while budget status for 2010 is unknown, ISEA assures us on its website that the program will remain available to ISEA members throughout 2010. See Illinoissolar.org for more information.
Property Tax Incentive - Special Assessment for Solar Energy Systems
Passive solar space heat, solar water heating, active solar space heat and photovoltaic systems qualify for a special property tax assessment under Illinois law administered by the Illinois Department of Commerce and Economic Opportunity (DCEO). Under the law, property owners who register with a chief county assessment officer will have their solar energy equipment valued at no more than a conventional energy system. The exemption is not valid for system components that could also be used in a conventional system, including structural, aesthetic or insulating equipment.
State Rebate Program - Solar and Wind Energy Rebate Program
The state of Illinois will pay up to 30 percent of system costs for solar water heaters, solar space heat, PV and solar pool heating. PV systems must be at least 1 kW in size and solar thermal systems must be designed to produce at least 50,000 Btus per day or contain at least 60 square feet of collectors. Maximum incentive is $50,000 and RECs remain with the system owner.
As is the case in so many states, funding for fiscal year 2010 has already been fully exhausted. The Department of Commerce and Economic Opportunity, which administers the rebate program, is no longer accepting applications. More funding is likely for FY 2011 and information should be updated around July 2010. For more information see DCEO.
PACE Financing - Local Option
Illinois has passed legislation allowing municipalities to develop and operate renewable and energy efficiency incentive programs based on the Property Assessed Clean Energy (PACE) template. These programs allow homeowners and businesses to skip up-front costs by borrowing from the city and paying the loan back through a voluntary, individual increase in property taxes. However, as of January 2010 no municipalities in Illinois offer PACE financing. Although the programs have been wildly popular across the country it will likely not be long before they start popping up in Illinois.
Net Metering
Up to one percent of a utility's peak demand from the previous year may be net metered in Illinois. Upon signing an agreement with their utility, solar homeowners, by law, must be credited for excess energy produced each month by their solar power system. From month to month net excess generation (NEG) is credited to the customer's next bill at retail rate, but at the end of the 12-month billing cycle, whatever energy is leftover is granted to the utility for free. However, RECs remain with the system owner (So if you've produced an extra MWh you may be able to get up to $65 through ISEA's REC aggregation program - see above). For more info on net metering in Illinois see the Attorney General's Office.
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