Illinois Solar Gets Closer to Game Time

The Illinois solar market is marching ahead to an eventful 2015.  Recent action on the Supplemental Procurement Plan means solar energy system owners should look for the Illinois SREC market to come to fruition very soon.

Earlier this month, the Illinois Commerce Commission released a draft Proposed Order on the Illinois Power Agency’s (IPA) Supplemental Procurement Plan. In the draft Proposed Order, the Commission reviews objections and comments submitted to them regarding the IPA’s plan and makes rulings on each issue. Many of the rulings solidified changes we examined in past articles on the Illinois solar market[s2] . The following conclusions are particularly noteworthy for current or prospective solar system owners in Illinois:

1. “New” vs. Existing Systems

First, the Commission reaffirmed the IPA’s decision to procure SRECs exclusively from “new” solar systems. Several parties disputed this point on the basis of its effect on price and fairness to existing systems. The Commission concluded, however, that the IPA’s proposed structure is consistent with the statute which created the Supplemental Procurement and is faithful to the intent of its drafters. Existing solar systems can participate in the IPA’s proposed regular procurement, which is governed by a separate plan. Maintaining a focus on new systems does the most, in the eyes of the IPA, to promote new solar build and a reduced SREC cost over time.

 2. System Size Categories

Second, the Commission concluded that the IPA accurately interpreted the law when it decided to procure SRECs from systems in two size categories: systems less than 25 kW, and systems between 25 kW and 2 MW.

Again, several parties objected on the basis of price and fairness to using size as the criteria in bid selection. The Commission supported the use of distinct size categories, and as we speculated, they acknowledged the potential disadvantages of a 30-kW system competing against systems as a large as 2 MW. While IPA is not obligated to create additional size categories for the entire procurement, IPA must add a third size category to its second procurement, which will take place in November. As a result, the November 2015 solar procurement will procure 50 percent of the SRECs from systems less than 25 kW in size, 15 percent from systems between 25 kW and 500 kW and 35 percent from systems between 500 kW and 2 MW.

3. What is a “new” system?

Third, the Commission clarified that the date used to determine eligibility, and qualify as a “new” system, will simply be the date a system was energized.  In order to qualify as new, this date must occur after the final approval of the Supplemental Procurement Plan, which we expect to occur in late January 2015.  

4. Credit Requirements

Fourth, the Commission considered a request to further reduce the credit requirements (deposits have been reduced once already from the original proposal). While acknowledging the concern over the proposed credit requirements the Commission supported the currently proposed levels. In light of the need for the IPA to balance the aim of promoting broad participation with the responsibility to protect against poor quality or bad faith bids, the Commission supported credit deposits of $16 per SREC for speculative bids and $8 per SREC for bids from systems which have been identified.

5. Miscellaneous Issues

The Commission also cleared up several minor issues such as metering requirements, eligible platforms for tracking and transferring SRECs, and potentially confusing information about qualified installers, The Commission also directed the IPA to provide further information on its website, specifically geared towards owners of small solar systems.

The Illinois Solar Market: Looking Forward

Interested parties can file Exceptions to the proposed order by December 22nd. Replies must then be filed by December 30th, after which the Commission will review both Exceptions and Replies and issue a final order by January 26th, 2015.

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