Jigar Shah's Message to Small Illinois Solar Companies

11 May 2012 9:06 AM | Michelle Hickey
Original Post at Heatspring Magazine by Brian Hayden

This week I flew to Chicago for the Illinois Solar Energy Association fund raiser.  Jigar Shah delivered the keynote to 70 registrants, packed into Emmett’s Place in Palatine.  I left at 9:30pm with an excited sense that Solar PV in Illinois is going to take off.


Worried you can't compete with

big, national solar companies?

"Nothing could be further
from the truth."



This was my second Jigar Shah presentation, (here is my first) and I’m on the verge of becoming a groupie – the guy spews useful information at a prolific rate.  He delivered great Illinois-specific policy insights, but my favorite topic he covered was, “When explosive growth happens here in Illinois, and all of the big, national, solar installation companies begin flooding the market, and installed prices drop to $2.75/watt, how can you possibly compete?”


When Jigar asked this question, the room got quiet, because it’s a very real concern for the small businesses that have been pushing a big rock up a hill for a long time.  They’ve built a market, invested in lobbying on the state level, and it would be bittersweet to watch the industry take off if they couldn’t reap the benefits.  Here was Jigar’s encouraging message:


  • Worried you can’t compete with bigger solar companies?  Nothing could be further from the truth.  Some of you might get bought, as the bigger players don’t know your market.  And some of you will grow to be the biggest players in this market because you know and care about your communities.  That does still matter.

  • You guys have a lower cost structure than the big guys.  Once you can get to 1 container/month, you’ll have the same materials cost structure, and you don’t have layers of management and overhead that the big guys do.  The most profitable solar contractors in the U.S. are 1 office, usually a husband and wife team, with 2 crews.

  • The only thing big companies have that you lack, is confidence.  You charge more because you plan to do one job per month and you need that job to cover salaries and overhead for that whole month.  Build a model to find out what sort of volume you need to do to install for $2.75/watt and start working toward that.  You have to believe it’s possible for it to work.

  • The biggest impediment to you making money in the solar business is the fact that you love solar so much, so you forget about the basic principles of business: you have to have more money coming in than going out.

  • Everyone here needs to understand third party financing.  It’s not as complicated as you think it is, and it’s a fundamentally easier sell, so it’s opening up bigger and bigger markets. (Note: HeatSpring has a free online Solar Lease Training.)

  • It’s critical that you understand how the SRECs are going to be valued here in Illinois.  Springfield is far, but you’ve got to go.  You think you’re above lobbying and getting involved with government, but they need to see your face, and they need to hear where you’ve installed solar, and who your customers are.  They care about that stuff and it makes a big difference. (Note: HeatSpring has a free online Understanding SRECs training.)

Events like this are a great reason to join ISEA, or whatever your local organization is.  There’s no substitute for live networking, getting involved, and getting the inside scoop on what’s coming.

The Illinois market feels like Massachusetts in 2008.   With the Renewable Energy World analysis of the Solar PV Market in Massachusetts in the back of my mind, I felt like I could provide useful lessons for how to win as the industry grows.  I truly think we’re going to see something great happen in Illinois in the coming years.

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 http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=88&GA=99&DocTypeId=HB&DocNum=2607&GAID=13&LegID=88134&SpecSess=&Session=

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 http://www.illinoissolar.org/SRECTrade-FAQ


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.



Copyright © 2009 - 2014  Illinois Solar Energy Association

Home   About Us   Events Calendar   Join ISEA   News   ISEA Blog   Employment

Powered by Wild Apricot Membership Software