Illinois Special Procurement

25 Jul 2014 1:02 PM | Anonymous

By Shannon Weigel, ISEA Board Member

Saturday, June 28th, Governor Quinn signed House Bill 2427 authorizing the Illinois Power Agency (IPA) to direct a one-time $30 million procurement of RECs.

In anticipation of the Governor’s signature, the IPA held a preliminary stakeholder workshop on  June 12th, to discuss the program design for implementing the Supplemental PV Procurement Plan. Many questions were raised about the role of aggregators, treatment of new vs. existing systems, need for credit requirements, contract terms and overall procurement process. The IPA solicited written comments, which were due on Monday, July 21st. and can be found on the IPA website ( The program design is officially underway at this stage and will evolve through a series of public workshops and program drafts from the IPA before being submitted to the Illinois Commerce Commission (ICC) later this year.

ISEA submitted comments with the over-arching theme to keep the one-time procurement simple and transparent to ensure success and create consumer and legislative confidence with the aim of demonstrating a working, long-term solution for the RPS program.

ISEA recommends creating 3 subcategories for the procurement. The first subcategory would be for large commercial projects between 400 kW – 2 MW. Although the ISEA comments did not officially comment on pricing techniques, it has been recommended by others that the  procurement process for this subcategory should be a competitive bid process for a 5 year contract for RECs. The payment would be a performance-based incentive (paid out for 5 years based on system production). 

The second subcategory would be for commercial systems between 25 kW – 399 kW. ISEA recommends flexibility be allowed with regards to payment type (upfront payment or PBI) and that system owners could chose the payment terms.

The third subcategory would be for systems < 25 kW, typically residential projects. The < 25 kW procurement would be set up like a Declining MW Block program. The declining block structure allocates specific capacities and provides incentives, which decline according the amount of PV deployed based on the capacity targets. The IPA would determine the money available for each block and the corresponding SREC price. The system owner would receive upfront payments when the system is energized. Half of the recs procured will from systems smaller than 25 kW.

ISEA suggests that the IPA hire a Third Party Administrator to handle the procurement, contract execution and other administrative functions.

ISEA also recommends that eligible systems be required to be completed no later than 12 months after the date of the SREC contract. Applicants can apply for a 6 month extension, which would be reviewed by the IPA or Third Party Administrator. Eligible projects that are not initially selected should be placed on a waiting list.

With regards to new vs. existing systems, ISEA recommends that existing systems be defined as those that were energized between July 1, 2013- June 30, 2014. New systems should be defined as those that were energized after July 1, 2014. It is important that “new” be related to the passage of HB 2427 as opposed to the final definition of both process and terms by the IPA. Existing systems in the < 25 kW category would be priced below the lowest “declining block” as the value to the industry is the lowest having already been built.

Next Steps:

The IPA is hosting a public workshop on August 7th, 2014 from 10am-3pm. Please plan to participate as stakeholder input is important.

The IPA will release the draft plan on September 29th and public comments will be due on October 14th. The IPA will revise the draft plan and submit the revised plan with the Illinois Commerce Commission by October 28th. The ICC has a deadline of January 26th, 2015 to approve the IPA’s plan.


  • 29 Jul 2014 5:39 PM | Ricky and Carol Hannah
    I have a 10kw system built in April 2012. If I would ad another 12kw would the additional 12 kw qualify for RECs?
    Link  •  Reply
    • 27 Oct 2014 5:20 PM | Lisa Albrecht (Administrator)
      Ricky & Carol,
      My apologies for not responding, I think you're the first comment we've had! Yes, you will be able to participate for all RECs generated. There will be two different procurement offered - the Regular Procurement and the Special Procurement. The rule making process is still currently underway but the Regular Procurement will be the best for existing systems. Keep watching for more details as we continue to participate in the development of these processes. We will likely hold a few educational events once the dust settles to let system owners know about their options. Thanks for the question!
      Link  •  Reply

Webinar Q&A

Q: There is a 2% limit on rate increases. Are you sure this is not a problem? The rate increase is in reference to the total procurement, so we do not anticipate it being an issue.

Q: I am a homeowner. Your invitation stated you may have some new information concerning Gov. Rauner's budget. That's what I'm particularly interested in. The proposed budget for 2015/2016, at this time has eliminated rebates and grants. ISEA’s position is that we will continue to advocate for the continuation of this program. There is also a legislative bill that has proposed an extension to this program through 2020 which we support and will continue to track.

Q: Can you provide an REC typical value for an average sized home with this proposed declining block program? I have a hard time explaining the value of RECs. Since Illinois has not had a REC price in the past, it’s difficult to estimate what the initial market value may be. The supplemental procurement will go a long way in establishing Illinois REC market prices. In the meantime, the Illinois Power Agency (IPA) will continue to research other markets to make the best decisions for the Illinois market. The goal, of course, is to install solar, and the purpose of the REC is to incentivize solar purchases and ensure pricing makes economic sense. As a reminder, there’s still a bit of the process left before we see what price RECs will have in Illinois. Once the legislation has been passed, and the REC price is published, we’ll update as needed.

Q: What recs are available for people who installed solar systems in 2014? If the system was energized prior to January 21, 2015, you qualify for the regular procurement event in September 2015.

Q: Does Exelon nuclear energy qualify as renewable energy with the 35% by 2030? It does not. Renewable energy is defined within the statute and includes wind, solar, and biofuels. More information can be found at

It is important to note that the Clean Jobs Bill, not to be confused with other energy bills, is the only bill that focuses on renewable energy while producing 32000 jobs per year.

Q: Will clean energy that has already been produced from existing systems be considered for auction? No. The RECs will only be from the contract date of the accepted bid moving forward.

Q: If I plan to install more solar panels in 2015, are IL rebates still available, or is it dependent on Governor Rauner's budget proposal? The program for the 2014/2015 fiscal year is closed. So any future rebate availability will depend on the budget proposal. However, consider the procurement events of 2015/2016 as potential funding sources.  This scenario strongly highlights why we need to pass the Clean Jobs Bill (HB2607/SB1485) as it will provide a way to raise the status of renewable energy to equal that of all other forms of energy. Thus, any perceived dependence on rebates and grants will be removed.

Q: Evidently the 2014/20­15 rebates were frozen. Is that still the case? At this time, rebate decision letters have gone out, clarifying which will be paid and informing the owners that no further extensions will be granted.

Q: When will the specific process of solar customers contracting to be paid for future SRECs in place of the Illinois DCEO Rebate program be rolled out?­ The first supplemental procurement will be June 18, 2015. Aggregators are already available. We have a list of preferred companies here

Q: Once the REC schedule is defined, can you post some investment payback time scenarios on the ISEA blog, including the declining block ­ to let people know what is a realistic investment outlook?

We will try, however, we don’t anticipate seeing any information on this until early to mid 2016.

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