When the Illinois Power Authority opened applications for community solar projects in February, the state was flooded with nearly 2 gigawatts' worth of project applications. A few weeks later, the Solar Foundation released a new round of jobs figures that showed Illinois added 1,308 jobs in 2018 alone, a 37 percent increase in the industry that placed the state as the lead solar employer in the Midwest.
Since 2016, the business membership of the Illinois Solar Energy Association, a 45-year-old trade association, has quadrupled, according to Lesley McCain, the group’s executive director.
“The opportunities for those businesses to be able to hire new people have grown,” she said. “Jobs have grown exponentially. I don't think anybody, including myself, envisioned the significant interest in solar in the state.”
Nevertheless, state energy leaders are now managing what McCain calls “a good problem, but a problem nonetheless.”
Solar advocates cheered the strong interest in community solar in Illinois. But the pile of applications is far bigger than expected, and leaders in Illinois are scrambling to try and accommodate the substantial interest in the program.
Additionally, state investments in solar and other renewables have buoyed job growth recently, but the funds are finite and industry leaders say money for renewable energy projects will be exhausted after this year. They are calling for more investment, lest Illinois start shedding jobs.
Waiting on the lottery
Much of the job growth in Illinois can be attributed to the passage of the 2016 Future Energy Jobs Act (FEJA), a massive energy bill that mandated that the state produce 25 percent of its energy with renewable resources by 2025.
FEJA requires the development of 400 megawatts of community solar. When the law passed a few years ago, Illinois had virtually no community solar. All the new applications triggered a state lottery approval system to determine which projects will actually get built.
There is far more interest in developing community solar in Illinois than is available as outlined by the state’s procurement plan, and it’s likely that only a fraction of the community solar projects will actually be approved, at least in this round.
“There is some concern,” McCain said. “People are waiting to see what their opportunities are following the lottery.”
Still, the vast number of applications shows that people in Illinois are interested in community solar, according to Laurel Passera, a policy analyst for the Coalition for Community Solar Access. “Looking at the huge amount of of interest through the number of applications that were filed, I think community solar will have a long and and productive growth [period] going forward in the state,” she said.
Summit Ridge sees big opportunity
Summit Ridge Energy is a community solar developer interested in Illinois. The company sited projects across the state, including in the counties of Lee, LaSalle and DeKalb in ComEd’s service territory, and Madison County in Ameren’s territory.
All of the projects were submitted to the Illinois Power Authority, and Summit Ridge Energy CEO Steve Raeder is awaiting the results of the lottery, which are expected in a few weeks. Raeder is hoping that the substantial interest pushes state leaders to expand the program and open a second lottery, which is by no means guaranteed.
“Unfortunately, only a small percentage of the applications that were submitted to the adjustment block program will be selected,” he said. “But we're very confident that the second program or an expansion of the existing program is forthcoming.”
Raeder is the former leader of SunEdison’s successful East Coast commercial and industrial business, which sold to Mitsui during bankruptcy proceedings for a reported $15 million.
Raeder left SunEdison then to launch Summit Ridge Energy with the financial support of Aligned Intermediary. He brought along Christian Redmond and Jarryd Commerford from his team and Brian Dunn from Hunt Alternative Energy.
In the beginning, the company’s focus was commercial customers — big-box stores, cities and federal agencies — that Raeder had worked with for years, but over time, Summit Ridge Energy pivoted to working with communities and developing community solar. They developed a nearly 7-megawatt community solar project in Maryland, and the company is heavily invested across Illinois.
“We like the participation that community solar allows,” Raeder said. “There's really been a fundamental shift in the industry from servicing commercial entities to allowing the ratepayer and residential customers to participate, and even further, enabling low- to moderate-income folks to participate in these programs, as well. You're seeing this roll out in the new incentive programs, and that community space is very much where we are focused.”
One group that's participating: Illinois farmers. Raeder's pitch: Allow him to develop a solar array on a parcel of farmland in exchange for predictable rent payment.
“What we're offering to select farmers is a financial offer that exceeds what they can generate with crop yields,” he said.
Fixing FEJA
Despite all of the action in renewable energy in Illinois, the state is still behind on its energy targets, and so state lawmakers are pushing two* major energy bills to solve the problem: The Path to 100 Act (HB 2966/SB 1781) and the Clean Energy Jobs Act (HB 3624/SB 2132). The Clean Energy Jobs Act, introduced last week, mandates 100 percent renewable energy in Illinois by 2050.
The Path to 100 Act, introduced in mid-February, expands the Illinois renewable portfolio standard to 40 percent by 2030. The bill’s proponents argue that Illinois has huge demand and shovel-ready projects, but the renewable portfolio standard is not sized to the current market. The bill will expand solar opportunities across the state while addressing FEJA’s issues, they say.
By statute, Illinois is supposed to hit 16 percent renewable energy production in 2020, but it’s on track for only 7 percent. While that’s nearly doubling the renewable energy that’s online in Illinois today, it’s well short of the state’s goal. The Illinois Power Authority tracks progress with renewable energy credits, or RECs. An August 2018 report reveals there is a significant REC gap.
Source: Illinois Power Authority
A fact sheet on the Path to 100 Act distributed by supporters says that the bill will create 21,000 new jobs, generate billions in new property taxes and landowner payments over the next 20 years, and community solar participants would receive $925 million in electric bill savings.
For community solar, the Illinois lottery created a risky market for community solar developers, and the state’s utilities are experiencing interconnection issues. They cannot plan to bring the new systems online until they know which ones will be selected by the lottery. With the new legislation, developers are looking for a system that can grow more predictably.
The bill creates "a path that is sustainable," said Andrew Barbeau, president of The Accelerate Group, a Midwest-based strategic consulting firm that advised clean energy advocates on the Illinois bill. "So we don't have to deal with these boom-and-bust cycles of development, where everyone runs into the state and chases community solar, and then we reach our limit, and they all leave for a few years until we pass new legislation, and then they all come back in. That's not going to work."
Another goal is to expand Illinois’ Solar for All Program and create a long-term solar marketplace across Illinois geared to low-income communities. The bill text mandates at least 25 percent of the incentives for the program be allocated for community solar in “environmental justice communities.”
Looming fears of market collapse
In January 2018, Mike Nicolosi, president of Rethink Electric, moved his solar installation business into a giant new facility, with nearly 10 times the space of the old one. He did so in anticipation of more work after the passage of FEJA. At the time, he employed six people, but in the following months he hired like crazy. He now employs 65 people.
Illinois spent $10 million on jobs training in 2017. State leaders awarded a range of business associations and social institutions funding to develop clean energy jobs training programs for people living in impoverished communities with high amounts of pollution. Nicolosi hired project coordinators, management engineers, and commercial and residential solar installers, who were trained with these funds by groups like the Chicago Urban League and the National Latino Education Institute.
“We were pulling some of the good candidates from this program,” he said. “They're still employed [and] working out very well.”
Nicolosi is concerned that solar market incentives will soon expire, and his nervousness stems from his experience in Las Vegas. He worked there when the solar market collapsed after Nevada’s public utility commission gave permission to NV Energy, the state’s only power company, to increase rates.
“It just wasn't sustainable without the state helping out,” he said. “And Illinois is in the same boat. Once we build out past the current block programs, there's no path beyond that. If we don't get a path to 100 percent, this is going to be a boom and bust.”
*A previous version of this story incorrectly stated that only one renewable energy bill had been introduced in Illinois. This story has been updated to reflect that two bills have been introduced in recent weeks: The Clean Energy Jobs Act and the Path to 100 Act.