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Illinois Community Solar Policy Guide for Asset Owners & Developers

Everything you need to know about Illinois’ current community solar legislation, eligibility rules, crediting mechanisms and other important market details, created by Perch’s internal policy team. We help asset owners navigate the growth of community solar in markets across the country, and as new laws are considered and passed, Perch will provide updates and perspective on how it impacts your business.

5 min read • Last updated: Sep 24, 2024

Topics covered

Illinois' Community Solar Program
Project Specifications and Program Details
Minimum Equity Standard, Equity Eligible Contractors, and Selection Process
Compensation Rate, Incentives, & Credit Mechanism
Market Analysis
Appendix
Other state community solar policy guides from Perch

If you're an Illinois resident or business owner looking to save money with community solar, visit our "Community solar in Illinois" page.

Illinois' Community Solar Program

The Climate and Equitable Jobs Act (CEJA) was enacted in September of 2021 and is the second major piece of legislation in Illinois impacting community solar in a meaningful way. The first bill, the Future Energy Jobs Act (FEJA) established two major programs: the Adjustable Block Program (ABP), also known as Illinois Shines, and Illinois Solar For All (ILSFA) which is a separate low-income solar program. CEJA updates and expands those programs.

CEJA creates a framework through which Illinois:

Sets a goal of 40% clean energy by 2030 and 100% clean energy by 2050
Requires the creation of equitable workforce development programs and funding.
Expands the community solar category to 250MW in new capacity annually
Increases the ILSFA program incentives from $10 million to $70 million annually

By the end of 2022, Illinois had 181 megawatts (MW) of installed capacity across 93 projects. The third-party Program Administrator, Energy Solutions, oversees both the ABP and ILSFA. The ABP is a state-administered program for new solar photovoltaic systems which provides payments in exchange for 20 years of Renewable Energy Credits (RECs) for what Illinois refers to as Traditional Community Solar (TCS). The TCS category makes up at least 30% of the ABP’s overall capacity but has exceeded the minimum in previous program years.

The ABP has no low-to moderate-income (LMI) carveouts. ILSFA is the program that focuses on increasing renewable energy generation benefits for LMI households and communities. However, the incentives in the Inflation Reduction Act (IRA) will likely ensure LMI participation in non-ILSFA projects in Illinois is at least at parity with federal guidelines.

Each year, Illinois opens the development of new renewable energy resources in “blocks” of Megawatts. The current block has 250 MWs available for development. The block is further divided into 2 groups based on the major utility’s (Ameren Illinois & ComEd) coverage areas.

Group A (includes Ameren Illinois, MidAmerican, Mt Carmel, small co-ops & municipal utilities) is allotted 30% of new generation, or 75 MWs of new generation that would be built in that service area which covers the southern three quarters of Illinois.
Group B (includes ComEd, small co-ops & municipal utilities) is allotted 70% of new generation, or 175 MWs of new generation that would be built in that service area which covers the northern quarter of Illinois including Chicago.

The ILSFA program is an incentive program that supports community solar development to benefit low-income households and communities in Illinois through the purchase of RECs. With the passage of CEJA, the ILSFA program has an increased annual budget of $70 million to support its programs:

40% of Solar for All funds will subsidize LMI customer for community solar participation
35% of funds will go to LMI community solar pilot projects
25% of funds will go to Incentives for non-profits and public facilities
It is a goal of this program that at least 25% of the incentives for this program be allocated to projects located in environmental justice communities.

When the Traditional Community Solar Block reopened, a total of 262 applications were received totaling nearly 700MW, nearly 3 times the available capacity for the program year. Click here to see the program capacity available and application processing statuses.

Project Specifications and Program Details

For the 2022 block which opened November 1, 2022, some updates were made to clear the waitlist and facilitate the transition from a lottery project selection system that existed prior to CEJA’s updates to the ABP, to a first come, first serve basis with minimum scoring criteria to be placed on the new waitlist. Those updates allowed that projects that were originally eligible for the lottery system must meet a small subscriber requirement and placed a cap on capacity awards for developers. In the following program years, projects should meet the criteria below.

Project Specifications

Each project has a maximum generation capacity of 5 MWs
Community Solar projects must be residential or small commercial customers with subscriptions of 25 kW or less for at least 50% of the facility’s nameplate capacity
Projects will feature 20-year REC delivery contracts that pay for RECs over time as they are delivered rather than the front-loaded payment schedule previously used

Program Details

There is a 20% developer cap on total MW awarded
Subscribers must be in the same utility territory as the project
Subscriptions must be transferable and portable within the same utility territory
No subscriber may own or lease more than 40% of a single project
Minimum subscription size is 200 W
Utilities must purchase unsubscribed energy at avoided cost rate (avoided cost is the incremental cost an electric utility would have incurred from a different source, such as cost of obtaining and using fossil fuels vs. using solar
Subscription of 90% of nameplate capacity or greater shall be deemed to be fully subscribed

Minimum Equity Standard, Equity Eligible Contractors, and Selection Process

Minimum Equity Standard & Equity Eligible Contractors

In the update to the ABP, Illinois underscored the importance of ensuring the transition to renewable energy prioritizes people and communities that have been excluded form economic opportunities in the energy sector and subjected to disproportionate levels of pollution and subsequent negative public health outcomes. In pursuit of a more equitable system, the Minimum Equity Standard (MES) requires participants in the ABP to ensure economic opportunities are more fairly distributed to all Illinoisans.

Starting in Energy Year (EY) 2023-2024 beginning June 1st, 2023, each Approved Vendor and designee must include a minimum of 10% Equity Eligible Persons (EEP) in their workforce, rising to a 30% minimum by 2030.

A new category called Equity Eligible Contractors (EEC) has been incorporated into the ABP program both with an exclusive block of capacity as well as a certification for the contractors themselves. Project selection scoring criteria heavily favors the use of EECs for the project development process.

Selection Process

Prior to reopening the Traditional Community Solar Block for applications on Nov 1, 2022, IPA released the Final Project Selection Guidelines to outline the criteria projects would have to meet in order to secure a spot on the waitlist for capacity in program year 2023 in the event that more applications were received than was available for program year 2022, a reasonable expectation given the previous popularity of this program. A minimum score of 5 points is needed to obtain a capacity reservation on the waitlist.

The same requirements are in place for Program Year 2023-2024. Click here for the Program Year 2023-2024 Guidebook.

Waitlist Scoring Criteria:

Built Environment – maximum of 4 points
- 2-point deduction for projects sited on Conservation Opportunity Areas
Siting – maximum of 4 points
Equity Eligible Contractors – maximum of 4 points
Interconnection Status – maximum of 4 points
- A signed Interconnection Agreement (IA) awards only 1 point
- Additional points are available based on queue position at substation and receny of an IA

Refer to the Final Project Selection Guidelines for a full explanation of the scoring criteria.

Compensation Rate, Incentives, & Credit Mechanism

Community solar subscribers will get credit on their electric bills at the price to compare rate for each kWh their subscription produces. This portion of the customers’ bill pays for electricity generation, as opposed to distribution, and usually accounts for about half of the electricity rate paid by residential customers in Illinois.

Project value comes from three sources:

REC Value
Supply Credit Value
DG rebate (base of $250/kW minimum and $250/kWh for paired storage)

REC Proces for TCS 2023-2024

	Group A	Group B
0 - 25 kW	$71.10	$82.37
25 - 100 kW	$76.16	$93.61
100 - 200 kW	$78.33	$95.12
200 - 500 kW	$73.02	$84.10
500 - 2000 kW	$63.72	$71.80
2000 - 5000 kW	$49.33	$53.31

Rate Classes & Adders

Projects selected after February 18, 2020, or Program Year 2021 and later have the Small Subscriber Adder incorporated into the REC price. Refer to the program guidebook for the Small Subscriber Adder if your project was selected prior to this change.

Small Commercial Rate Classes:

Commonwealth Edison: watt-hour delivery class & small load delivery class (Group B)
Ameren Illinois: DS-2 (Group A)
MidAmerican: GE, GD, GET, GDT, GER, & GDR (Group A)

Consolidated Billing Option

CEJA creates an option for Utility Consolidated Billing (UCB) by allowing owners/operators of a CS project to enter into a net crediting agreement with the utility. The utility can charge a net crediting fee to the CS operator at a maximum of 2% of the bill credit value.

Net metering billing has transferability between ownership of a valid billing address, customer switching to an ARES or vice versa, including transfer of all banked credits.
The tariff for electric utilities shall also provide a streamlined and transparent bill crediting system for net metering to be managed by the electric utilities.
Consumer protection requirement that there is a free 14-day contract-cancellation window.

ComEd has outlined their consolidated billing option, called Community Supply Subscription Billing (CSSB), in their Community Solar Handbook Chapter 4 and Chapter 5. CSSB would apply to all subscribers of a project and any subscriber using a Retail Electric Supplier (RES) and using a single bill option (SBO) cannot participate in consolidated billing for community solar.

As of April 2023, Ameren has yet to publish guidance for their consolidated billing option.

Market Analysis

The Illinois market is split between two major investor-owned utilities: Ameren Illinois and ComEd. The IPA is in the process of details surrounding the dual use potential of agricultural land for CS projects, which would make more parcels available in each utility’s respective service area.

Since the establishment of the MES, the use of EECs for future project development will likely be sought for many projects. Additional points for that category include various degrees of involvement for EECs, meaning if a project cannot achieve a maximum score by being an EEC Approved Vendor, points can still be attained in that category.

The ABP’s small subscriber requirement notable includes both residential and commercial subscribers as eligible small subscribers. However, with the expanded Investment Tax Credit (ITC), it is likely that residential subscribers – especially LMI subscribers – will be highly sought after to achieve the maximum possible ITC bonus. This ensures that the LMI market will be competitive outside of the ISLFA program.

ComEd

ComEd provides electricity to 4 million customers or roughly 70% of the state's population.
Covers Illinois’ largest city, Chicago, and the northern border areas next to Wisconsin.

Ameren

Ameren provides electricity to 1.2 million customers.
Covers most of the land area in Illinois, including the metro areas next to St. Louis.
Coverage area includes a greater amount of farmland that could be considered for agricultural dual use for CS projects.

Appendix

Program Resources

Interconnection resources

Final Order on Interconnection Rules from the ICC
A signed IA is not required for projects since it has been determined that it isn’t a useful proxy for project maturity. The ICC maintains the first-come, first-served project selection criteria. If projects are submitted on the same day, the ICC accepts the IPA's proposed scoring process

Coverage map

Group	Category	Block 1, Block 2, Block 3	Block 4	Block 5	Block 6
Group A (Ameren Illinois, MidAmerican, Mt. Carmel Public Utility)	Traditional Community Solar	Approved Projects submitted before February 13, 2019 - Assigned by lottery	Not accepting applications	Opened November 1, 2022 - First come, first serve	Opened June 1, 2023 - First come, first serve
Group B (ComEd)	Traditional Community Solar	Approved projects submitted before February 13, 2019 - Assigned by lottery	Not accepting applications	Opened November 1, 2022 - First come, first serve	Opened June 1, 2023 - First come, first serve