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As solar funding dries up, Illinois renewables need CEJA

Despite rapid solar adoption after Illinois passed strong energy legislation in 2016, the state is fast-approaching a solar cliff–the funding that helps propel the state’s solar industry is running out. But the Clean Energy Jobs Act (CEJA) could prevent the state’s clean energy progress from toppling over the edge.

Specifically, the state is running out of funding for solar renewable energy credits (SRECs). SRECs represent the environmental benefits of solar energy and are separate from the electricity generated by the panels. SRECs can be bought and sold, and whoever owns the SREC has the legal right to say they are using solar power. Illinois’ renewable portfolio standard requires the state to produce 25 percent of its electricity from renewable energy by 2025. To help the state meet the solar requirement, solar panel system owners can sell the SRECs that their panels deliver. Essentially, the state pays solar system owners to include the solar output of their system towards the state’s overall 25 percent renewable energy goal.

But the pool of money available for these SRECs is drying up. Funding is already gone for community solar projects and large distributed generation systems (over 10 kW). All that remains of the SREC funding is for small solar systems (this includes most residential systems). While there isn’t an exact date for when the small system funding runs out, most estimates expect it will be used up by the end of 2020.

Without these SRECs–and other incentives, such as federal tax credits–going solar becomes more expensive and less attractive. This spells trouble for the state’s renewable goals.

“There are two urgent reasons to pass CEJA: To avoid a huge increase to our electric bills and to prevent the state from falling off the solar cliff,” said Christina Uzzo, CUB’s Environmental Outreach Coordinator. “We have become a renewable energy leader in the nation thanks to strong energy policy, but all that progress is threatened if we don’t pass the Clean Energy Jobs Act.”

In March this year, Illinois generated a little over 1,650,000 kilowatt-hours (kWh) from non-hydroelectric renewables, about 13 percent of the state’s total generation. With little funding left and no new funding on the horizon, Illinois could badly miss the mark–unless immediate action is taken.

The passage of the Future Energy Jobs Act (FEJA) moved Illinois in the right direction. The 2016 legislation helped clear the path for more than 2,000 megawatts of solar development (when the policy went into effect in 2018, fewer than 100 megawatts were operating in Illinois). 

FEJA also made a critical edit to Illinois’ renewable energy laws to streamline and sustain the process by which the Illinois Power Agency–the state office tasked with managing utilities’ power purchases–acquires funding for renewable energy purchases. 

This legislation effectively gave Illinois a solar makeover, boosting the state from a reluctant renewable investor to one of the nation’s top solar markets. But the act does not, on its own, accomplish the level of renewable energy deployment needed to meet the state’s 25 percent by 2025 mandate.

Enter the Clean Energy Jobs Act (CEJA). This clean energy legislation promises to prevent the state from tumbling over the solar cliff by beefing up funding for renewable energy. FEJA’s follow-up legislation would attract $30 billion in new solar and wind investment to Illinois.

CEJA would also boost energy efficiency standards and protect the state from a federal regulatory ruling that could hit most Illinois consumers with up to $1.7 billion in higher bills over the next decade. CEJA is the only energy legislation in Springfield that could secure savings for consumers while ramping up renewable energy development in the state.

Consumer and environmental advocates were hoping to pass the bill this Spring, but with legislative session on hold, it’s unlikely the bill will be considered until this fall. Urge your state legislators to take up CEJA this year and help ensure Illinois’ progress toward clean, affordable energy won’t be stopped in its tracks.