What is the Illinois Solar Energy Incentive and How Can it Work for You?

Illinois Shines Overview: Understanding SRECs

As the world shifts toward renewable energy, states like Illinois are leading the charge with innovative programs that encourage solar energy adoption. One such initiative is the Illinois Shines program, which plays a crucial role in promoting solar energy installations across the state. This blog will provide an overview of the Illinois Shines program and delve into the concept of Solar Renewable Energy Certificates (SRECs) and how they function.

What is Illinois Shines?

The Illinois Shines program, originally known as the Adjustable Block Program (ABP), was launched to facilitate the growth of solar energy in Illinois. It aims to provide financial incentives for both residential and commercial solar installations, making solar energy more accessible and affordable for Illinois residents.

Key features of the Illinois Shines program include:

• Incentives: The program offers upfront rebates and ongoing incentives for energy produced from solar installations.
• Block Structure: It operates on a block system, where specific amounts of incentives are available until the allocated funds for each block are exhausted. This encourages timely installations and market growth.
• Equity Focus: The program includes provisions to support low-income households and communities, ensuring equitable access to solar energy benefits.

What is an SREC?

SREC stands for Solar Renewable Energy Certificate. It is a market-based instrument that represents the environmental benefits of producing solar energy. For every megawatt-hour (MWh), or 1,000kWh, of electricity generated by a solar energy system, one SREC is created. These certificates serve several purposes:

1. Proof of Renewable Energy Generation: SRECs act as proof that a certain amount of solar energy has been produced, helping states meet their renewable energy mandates.
2. Market Trading: SRECs can be bought and sold in a marketplace, creating a financial incentive for solar energy producers. Utilities and energy suppliers are often required to obtain a certain number of SRECs to comply with renewable energy standards, driving demand. In Illinois, this is accomplished at the utility level with ComEd and Ameren, the two major incumbents.
3. Revenue Generation: Homeowners and businesses that generate solar power can sell their SRECs, providing a predictable financial incentive that can help offset installation costs.

How SRECs Work in Illinois

In Illinois, SRECs are integral to the Illinois Shines program. Here’s how they work:

1. Certification: When a solar system is installed, it must be registered with the Illinois Shines program. This often involves registering the system with an Approved Vendor, which is an entity approved by the Illinois program to facilitate SREC management. An Approved Vendor can often times also be the company that installs your system.
2. Generation: For every MWh of electricity produced, the system generates SRECs. These certificates are tracked and managed through a centralized system.
3. Sales: Once generated, SRECs can be sold on the open market. The price of SRECs fluctuates based on supply and demand dynamics and is categorized by the inverter size, which is the maximum rated output in AC. Typically, the more solar energy that is produced and the more participants there are in the market, the lower the price of SRECs may be, and vice versa.
4. Compliance: Utilities in Illinois must meet specific renewable energy targets, which they achieve by purchasing SRECs. This creates a steady demand for SRECs, further incentivizing solar installations. In Illinois, the legislation that kickstarted solar was FEJA, the Future Energy Jobs Act in 2016 and recently revised in 2021 under the Climate and Equitable Jobs Act.

Benefits of SRECs

• Financial Incentive: SRECs provide a significant financial benefit to those that own or manage a solar installation, making it easier to recoup installation costs.
• Support for Renewable Energy Goals: They help states meet renewable energy goals and reduce reliance on fossil fuels.
• Market Dynamics: The buying and selling of SRECs create a dynamic market that can foster competition and innovation in the solar energy sector.

The Illinois Shines program, coupled with the SREC framework, offers a robust mechanism for promoting solar energy in Illinois. By providing financial incentives and creating a marketplace for SRECs, the program supports both the growth of renewable energy and the economic empowerment of individuals and businesses investing in solar technology. As Illinois continues to expand its renewable energy initiatives, understanding these components will be crucial for those looking to tap into the benefits of solar energy.

Need Help?

ilumen Solar is here for support! As an Approved Vendor for the Illinois Shines program, we are here to consult and manage the process so that you can claim the incentives without all the confusion. Are you a customer who would like to participate, or an affiliate who needs guidance on how to get involved - check out our Consulting Services.