The state has completed a plan to jump-start the solar-panel industry in Illinois with approval of $30 million worth of energy purchases from new such projects.
The Illinois Commerce Commission today approved the third of three competitive procurements conducted by the Illinois Power Agency. All told, the five-year contracts will allow for the construction of roughly 1,000 small-scale solar projects throughout the state, totaling about 30 megawatts of capacity.
The money comes from a state clean energy fund. Under state law, retail electricity suppliers must pay into the fund annually based on how much business they’re doing in the state.
Even though the source of the cash is residential and commercial customers of retail electricity suppliers, the funds are subject to state appropriations. With the state still operating without a budget thanks to the impasse between Gov. Bruce Rauner and Democrats in the Legislature, the IPA can’t spend the money.
That could make for some nervousness among project sponsors if the stalemate drags on.
The procurements themselves were the product of a compromise in 2014 between Exelon—the state’s largest power generator and parent of Commonwealth Edison—and renewable energy producers and environmental groups. The parties had tried to broker a deal to repair Illinois’ clean energy law, under which the state’s power mix is to include a steadily increasing percentage of renewables.
That law, first passed in 2007, remains problematic as questions about funding have made it a poor vehicle for financing new wind farms in the state. Unable to agree to a broad compromise, Chicago-based Exelon and the clean energy supporters agreed to allow the IPA to spend up to $30 million on projects installing solar panels on residential and commercial rooftops.
Under the last of the procurements made public today, $15 million will be allocated to eight developers. About half the energy output is going to projects of less than 25 kilowatts each—generally residential.
Average winning prices in the final procurement ranged from just less than $100 per megawatt-hour to $235 per megawatt-hour.
At 30 megawatts, the procurements are a small first step for Illinois. Other states have been more aggressive in incentivizing small-scale solar projects. New Jersey, for example, has installed more than 1,000 megawatts—about the capacity of a nuclear reactor.