Illinois solar incentives and rebates: The state’s path to achieve 100% clean energy by 2050

Headshot photo of Dan Smith, DSD
By Dan Smith, Vice President Markets Team at DSD Renewables

Did you know that as of April 2024, Illinois was ranked #1 among 50 states and the District of Columbia for energy democracy and utility accountability? It also currently has over 8.6 GW of solar, wind, and energy storage capacity, making it the fifth largest generator of renewable electricity in the nation.

Through its Climate and Equitable Jobs Act (CEJA), passed in 2021, Illinois has a statewide target of 100% clean energy by 2050, with interim goals of 40% renewable energy by 2030 and 50% by 2040. To hit these targets, Illinois created a multitude of solar incentive programs and policies that encourage solar development across the state.

Illinois Shines (previously known as the Adjustable Block Program)

The Illinois Shines program is a state-administered solar incentive program created to facilitate the development of new solar distributed generation and community solar projects through the issuance of solar renewable energy credit (SREC) delivery contracts, as required by Illinois law. Illinois Shines was developed under the Future Energy Jobs Act (FEJA) that passed in 2016. It is the biggest solar program in the state designed to help Illinois meet its renewable energy goals and encourage solar installations.

Illinois Shines usually opens for applications in the beginning of June (June 3rd of this year) and the blocks remain open until annual capacity is reached. Each group of utility territories has its own capacity, and once the capacity is reached, the projects are placed on a waitlist for priority for the following year.

If your project is accepted in the Illinois Shines Program, you will earn one SREC for every megawatt-hour (MWh) of electricity your solar panel system is expected to produce over 15 years. The amount you earn for each SREC depends on your utility company and the size of your solar panel system. There is limited availability each year and the SREC rate usually declines slightly every year, so the sooner you go solar, the higher your payment will likely be.

For the new 2024-2025 blocks that opened on June 3, 2024, some changes are being made. In addition to expanding the overall program capacity to 800 MW, the Program is also prioritizing distributed generation within the Public Schools category with a statewide MW allocation.

The Initial capacity allocation (by MW) for each category for the 2024-25 Program Year is as follows:

Chart displaying the Initial capacity allocation (by MW) for each category for the 2024-25 Program Year.

Solar for Public Schools in Illinois

A public-school project is defined as a distributed generation or community solar project that is located on public school land. In the 2024 Long-Term Plan, the Public Schools category is further divided into two subcategories:

  • Distributed generation (onsite solar): 75% capacity of the Public Schools category will be set aside for distributed generation projects
  • Community solar (offsite solar): 25% of the category will be set aside for community solar projects.

How can commercial companies apply for Illinois Shines?

Illinois Shines incentives are provided to approved vendors, like DSD, and these incentives are passed on to customers, in forms such as a lower energy rate with a Power Purchase Agreement (PPA). Customers not interested in a PPA can lease their roof or land and generate a new form of revenue with a Solar Lease Agreement. Regardless of the contract structure, to apply for the IL Shines incentives, the Approved Vendor will provide:

  • A completed Interconnection Agreement
  • Permitting approval
  • Demonstrated Site control with a PPA or Lease Agreement

Favorable net energy metering policies

In Illinois, net energy metering, or net metering (NEM) plays a crucial role in incentivizing solar adoption. With this billing mechanism allowed in the state, businesses can generate electricity through onsite renewable energy sources, like solar, export any excess energy back to the grid, and get credit for it. This simply means that whenever your solar system generates more power than is immediately needed by your business, your utility will compensate you for contributing that excess energy back to the grid.

How can commercial companies apply for net metering in Illinois?

If you are located in Ameren, ComEd, or MidAmerican service territory, you are eligible for NEM. However, these utilities in Illinois will transition away from NEM after January 1, 2025. The new compensation rate plan hasn’t been finalized yet, but customers who apply for interconnection within these utilities before January 1, 2025, will be grandfathered in with the current NEM policy for their system’s entire lifetime.

NEM is a fantastic mechanism to maximize the value of solar, so if your company is interested in adopting solar, we recommend you start the process soon to ensure you are exempt from the new NEM rules and get billed in the NEM legacy for the term of your solar agreement, which will increase your savings tremendously.

Utility-provided solar rebates

Some equipment rebates are also available in certain utilities in Illinois as a form of incentive to continue to increase renewable energy in the state. Ameren and ComEd, for example, provide a rebate for customers who install solar and/or battery storage with a smart inverter. This is sometimes called a “distributed generation rebate” or a “smart inverter rebate.”

What defines a smart inverter?

In Illinois, a smart inverter is a device that converts direct current (DC) to alternating current (AC) and can help support the grid. They must also meet the IEEE 1547-2018 equipment standards, or the UL 1741 SA standard if the IEEE standard isn’t available.

For small commercial solar customers (those who have a monthly demand of less than 150 kW in 11 of the 12 monthly billing periods during the prior calendar year), this rebate equals $300/kW for installed solar project capacity and $300/kWh for associated energy storage (commonly referred to as “batteries”). For commercial and industrial customers (projects over 150 kW to 5 MW), the rebate is $250/kW for generation and $250/kWh for energy storage.

How can commercial companies apply for smart inverter rebates

Each utility has its own application process and similarly to Illinois Shines, the approved developer is the one conducting the application, monetizing the incentives, and passing value on to customers as a lower energy rate or a higher lease payment.

Illinois Solar for All (ILSFA)

Another great incentive for the state is the Illinois Solar for All program. This program was designed to provide greater access to the renewable energy economy for income-eligible communities. Income-eligible nonprofits and public facilities serving low-income or environmental justice communities can participate in ILSFA by installing onsite solar projects. Similarly to Illinois Shines, the ILSFA program provides payments in exchange for 15 years of SRECs from a utility contracted to buy the SRECs from solar developers and contractors.

How can businesses take advantage of Illinois’ commercial solar incentives?

If your company is interested in exploring the cost savings and sustainability benefits provided by adopting solar, DSD and our Illinois market experts are here to help you. With a pipeline of over 124 MW (and growing) in Illinois and over 1GW of solar and energy storage across the country, we are experienced in understanding how the incentives and regulations work and will be able to maximize the opportunities available and increase savings for your business.

Take the first step.

Not sure how to get started? Our renewables experts are here to help. Reach out to us today.

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