June 4, 2014

Here Comes the Sun: Rooftop Solar Panels Get Jump-Start in Illinois

Call it Illinois' welcome to SolarCity.

A compromise measure has surfaced in Springfield that's aimed at jump-starting the market in Illinois for solar panels on homeowners' rooftops, a much more common sight in states like Arizona and California. 
The new amendment to the bill, HB 2427, would require the Illinois Power Agency, which procures 
electricity on behalf of utility customers statewide, to buy up $30 million in electricity from clean sources, mainly solar installations.

The bill, supported both by environmental groups and by the state's largest power generator, Chicago-based Exelon Corp., is a fallback alternative to an overhaul of Illinois' clean energy law, which environmentalists say is broken because of changes in the state's power market that have made it next to impossible to finance new renewable energy projects. That broader effort died earlier this month.

The compromise, authored by Sen. Don Harmon, D-Oak Park, could see Senate action as early as tomorrow. With no opposition from industry, environmentalists or consumer advocates, the measure is expected to pass and be sent to Gov. Pat Quinn, an ardent supporter of clean energy.

“We support this proposed legislation to spur more clean energy investment in Illinois,” Exelon said in a statement. The Environmental Protection Agency “soon will release new rules regulating greenhouse gases from power plants. It is anticipated that they will require each state to develop a comprehensive plan to maintain and expand clean energy resources like wind, nuclear, hydro and solar energy. We look forward to working with stakeholders on ways to maintain the state's clean energy edge.”

The bill gives the IPA considerable discretion in how to distribute the money, which comes from a renewable-energy fund already paid into by power suppliers serving Illinois customers. But advocates hope the lion's share goes to solar installations on rooftops.

"National solar companies have looked at Illinois with interest," said Sarah Wochos, senior policy advocate at the Chicago-based Environmental Law and Policy Center, which has pushed for broader clean energy law reform but is supporting the compromise. "We hope this bill kick-starts that."

It's not just residential providers that are interested. Also seeing opportunity is Chicago-based SoCore Energy, which provides rooftop solar power to big retailers and other commercial clients.

"We are the largest player in this market," SoCore President Pete Kadens emailed. "We have deep relationships with Walgreen, Target, Ikea, JC Penney and many others that we can leverage to create more jobs and more solar energy here in Illinois that anyone, given our territorial knowledge of the space and size. 

The incentives (in the bill) could shift our revenues that are now 96 percent outside of Illinois to a better number—something like 20 percent of our revenue could come from Illinois."

Depending on how much of the $30 million the IPA allocates to solar panels on rooftops, the money could result in up to 5,000 such new installations on top of homes, advocates say.

Companies like San Mateo, Calif.-based SolarCity Corp., the leading solar installer in the country, and a host of smaller players have built businesses by persuading homeowners to lease their rooftops for solar panels. The panels help power those homes and also reduce homeowners' electric bills by selling excess power into the grid. Princeton, N.J.-based power generation company NRG Energy Inc., one of Exelon's rivals, recently purchased a solar installation firm, with an appetite for many more such deals.

The legislation will allow existing utility-scale solar projects in Illinois to participate in the procurement as well. Effectively, that would allow bidding by Exelon's 10-megawatt solar farmon Chicago's South Side, the largest urban solar project in the U.S.

Likewise, the IPA could set aside money for new utility-scale solar projects. Chicago Mayor Rahm Emanuel wants to use old industrial sites on the South Side for clean energy.

Under the bill, the IPA would have 90 days to write a plan for conducting the special procurement, which would be subject to approval by the Illinois Commerce Commission. The bids likely would take place early next year.

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