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The best states for a home solar energy system aren't always the sunniest; those who benefit the most from installing a solar photovoltaic (PV) system for their home spend a lot of money on electricity and live in a state with good solar programs and incentives.
Illinois may not have the year-round sunshine of the Southwest, but it does have a great solar power market because of the available financial incentives. In addition to the 30% federal solar tax credit (investment tax credit or ITC) for solar system owners, Illinois residents can receive additional financial benefits through the state's solar renewable energy credits (SREC) market.
Find out what solar panels cost in your area in 2024Illinois's renewable portfolio standard (RPS) commits the state to produce 25% of its electricity from renewable energy by 2025. Of that 25%, 6% must come from solar. This is where SRECs come in – a utility can claim the electricity produced from your home solar system to help meet RPS requirements by purchasing SRECs. Essentially, you can generate additional income from your panels' power to help the state meet the solar requirement. The idea is to boost Illinois solar investments by increasing their monetary value and offering savings on electricity bills.
In the past, the Illinois Power Authority (IPA) bought SRECs in "procurement rounds." Homeowners would typically sell their SRECs through an aggregator who acts as a broker between property owners and the state. These brokers will pay property owners for their SRECs every quarter over five years and sell them to the IPA during the specified procurement rounds. With the new SREC program, it's a bit different – the current SREC program lasts longer, and the price you receive for each SREC is fixed and dependent on your utility company, system size, and how soon you go solar.
In 2017, the Illinois government created new legislation that altered the state's existing Renewable Energy Certificate (REC) program structure. The Future Energy Jobs Act (FEJA) took effect on June 1, 2017. It is designed to stimulate job creation in clean energy, assist the state in meeting its ambitious RPS goal by 2025, and promote energy efficiency.
FEJA established the incentive structure known as the Adjustable Block Program (ABP) or the Illinois Shines program. Rather than the old five-year SREC program, this new incentive structure lasts for 15 years worth of solar production. Illinois SRECs are sold at a fixed price determined by contracts rather than the variable market prices of the old SREC program. In addition to FEJA, the Climate and Equitable Jobs Act (CEJA) significantly expanded the ABP Program in 2021.
The Illinois Shines or ABP Program uses a "block" structure to determine the value of an SREC. The state set a specific amount of installed solar (in megawatts, MW) and an associated SREC price for each block. Previously, the incentive transitioned to a new block with a lower price once it reached its set amount of installed solar – this resulted in fewer available incentive funds as more people installed solar. However, CEJA altered the program from this cascading approach to an annual block approach. Now, when a block's capacity is filled, applications are placed on a waitlist until the next program year (if filled mid-year). Block eligibility depends on a few factors:
Currently, two groups are associated with the ABP program: Group A and Group B. Block groups are determined by utility companies and load zones. Solar projects serviced by Ameren Illinois, MidAmerican, Mt. Carmel, Rural Electric Cooperatives, and Municipal Utilities located in MISO belong in Group A; Commonwealth Edison (ComEd), and Rural Electric Cooperatives and Municipal Utilities located in PJM belong in Group B.
The block groups are divided into four main categories: Small Distributed Generation (DG), Large DG, Traditional Community Solar, Community-Driven Community Solar, and Public Schools. From there, each category is further divided by the size of the solar installation; if your installation produces less than 25 kW, you fall into the Small DG category, whereas the Large DG, Traditional Community Solar, Community-Driven Community Solar, and Public School categories all range from 25 kW up to 5,000 kW. Lastly, each size range within a category corresponds to an SREC price.
Once you determine your block group and the size of your installation (most home solar systems will qualify as a Small DG), you can use this chart from the Illinois Power Agency below to understand how much your SRECs might be worth. You can also check the current block status here.
Importantly, the pricing of your SRECs is fixed, and when you receive the incentive depends on the size of your solar panel system; if you're installing a system with an inverter size of less than 10 kW, you receive your SREC incentive as an upfront lump-sum payment. However, if your system is larger than that, you receive the payments over five years.
This incentive structure is very similar to the Megawatt Block rebate available in New York State and the SMART incentive in Massachusetts.
