By Lisa Albrecht

Lots to report on policy in Illinois as ISEA undertook the busiest legislative session in our history. As we continue to grow our advocacy efforts, a key 2015 highlight was hiring John Kamis of Carpenter Lipps & Leland to lobby on behalf of strong solar policy in Illinois. With many issues in play this year, it is critical to our success that we have a voice and constant presence in Springfield, ensuring renewable energy is at the table during energy conversations.  John has been vital to getting the attention of leadership in both the House and Senate and secured strategic meetings in both chambers as well as the Governor’s office. As you can see below, solar policy is a dynamic force and we are excited to be driving change forward! The solar industry's financial support is imperative for our collective success. More information about ISEA’s advocacy work and sponsorship information will be in our next newsletter.

Clean Jobs Bill (SB1485/HB2607):  Energy remains a key topic for Illinois law makers with 3 important energy bills up for debate – the Clean Jobs Bill, Exelon’s nuclear bailout bill and ComEd’s bill for restructuring rate plans. [see http://www.illinoissolar.org/Press for related news reports] Unfortunately, despite significant efforts from the Clean Jobs Coalition, the bill did not come to vote during the regular session as legislators focused heavily on budget issues for both Fiscal Year 2015 and 2016.  Law makers will continue to work through the summer on a combined “super bill” that is likely to contain aspects of all proposed energy legislation.  ISEA hosted over 30 events this spring in support of the Clean Jobs Bill including Solar Lobby Day with nearly 50 attendees and several Legislative Solar Socials, solar events in district that allow representatives to discuss clean energy legislation with constituents.  We will continue these efforts over the summer so please watch your emails for invitations to host or participate! Momentum is in favor of the Clean Jobs Bill as most officials agree the RPS is broken and clean energy must be a priority for the future of Illinois.  Proof is in the pudding as our bill has 58 co-sponsors in the House and 26 in the Senate, nearly enough bi-partisan support to pass both chambers!  It is CRITICAL that we keep up the pressure, reminding elected officials this is important legislation to all constituents.  Contact Lesley McCain if your organization would like to join the coalition and please sign a letter of support to be sent to your senator/representative as well as Governor Rauner’s office. 

Rebates/Grants:  Rebate recipients and installers had a roller coaster ride as funding was frozen for over two months while the governor’s office reviewed all state spending.  Ultimately the promised funding was awarded but not before many cancelled their commitments to install, a devastating blow to installers.  Those who proceeded with their installations were held to the original deadlines creating a stressful spring as no extensions were allowed.  Additionally, all grant awards still remain under review and ISEA continues to work with DCEO to pressure the governor’s office to make fair decisions soon.   We are hopefully that the “business minded” governor will recognize this burden and honor the states commitments, allowing projects to proceed as planned.  DCEO has not been given a timeline for resolution. 

Meanwhile, ISEA has been working to extend the rebate/grant program (SB0051) scheduled to sunset in December 2015 to 2020.  A few procedural events caused delay but it is our understanding this issue will also be addressed in summer budget negotiations.  Currently Governor Rauner’s proposed budget does not allocate any funds toward the DCEO rebates/grants and we have advised the industry, for the moment, to assume the program may be finished already.  We will continue to fight the good fight but realistically are not certain a win is likely with the larger financial issues.  We will continue to emphasize these are rate payer funds and not tax payer dollars but to date that has not been a winning argument.  More to come! 

Supplemental Procurement:  It’s finally here – the Illinois Power Agency (IPA) will host the 1^st DG procurement of Renewable Energy Credits (RECs) on June 18^th.  Funding will primarily be aimed at new projects installed after January 21, 2015.  The IPA will run a reverse auction, allocating 50% of the procurement to systems <25kW and 50% for systems > 25kW.  Pricing will be market driven as bidders are able to request pricing needed to ensure the development of a project.  Once bidding is closed on June 18^th, the procurement administrator will eliminate any bid that is above a “confidential benchmark” or price cap.  Awards will be granted to eligible bidders until the state reaches their $5M budget.  Interested parties can still participate by contacting aggregators.  Please reference previous blogs for additional information on how to participate. 

Regular Procurement:  Rules have not yet been established for the regular procurement of RECs for systems installed prior to January 21, 2015.  We anticipate that the primary procedures and requirements will be similar to the Supplemental Procurement.  System owners will work through aggregators who will represent their interest in a similar reverse auction that will be held in September 2015. We recommend contacting the 3 aggregators on the ISEA procurement page now to indicate your interest in participating.  Pricing for RECs will also be managed through a reverse auction and only new RECs will be eligible to be sold meaning you cannot back date your REC generation beyond September 2015.  Payments will be made over 5 years in quarterly payments based on performance data. 

Next Steps:  The Policy Committee will continue pushing these action items forward but need your support both physically and financially.  The states with the strongest and fastest growing solar markets are states with strong, predictable policy.  It is our responsibility and opportunity to help shape that future in Illinois but we cannot do it alone.  The big energy corporations all have multiple lobbyists serving their interests daily but we have something more powerful – you.  Poll after poll shows that Americans and Illinoisans overwhelming support clean energy. Study after study proves that solar is good for the economy, environment and job creation. But we need to be active and loud if we are to be sure our voices are heard.  Please consider a donation to help continue our efforts in Springfield and vote with your time and participation in upcoming events.  If you are not yet an individual or corporate member, please join.  Together we can carve-out a clean future for Illinois while driving economic growth in the fastest growing job market in the country – renewable energy! 

by Taylor Gendel

Wednesday, May 6^th 2015 was ISEA’s Solar Lobby Day in Springfield and my first time attending. The capitol was buzzing with energy as we embarked on our journey to promote the Illinois Clean Jobs bill.

 

Everyone who attended ISEA’s Lobby Day was split into groups  according to their legislative districts and tasked with tracking down and attempting to speak to a list of Representatives and Senators. I personally spent this time hand delivering letters of support for the Clean Jobs Bill, signed by ISEA event attendees, to legislator’s offices.

The capitol schedule is unpredictable and ever changing, so everyone spent a lot of time regrouping and running around when meetings ran late or plans were changed. Someone in the group had a pedometer and said his group walked 6 miles throughout the day.

StraightUp Solar was one of the groups that attended Lobby Day. Shannon Fulton and Emma Gilmore provided their reflection of the day:

“StraightUp Solar enjoyed taking part in this important event and looks forward to growing our business with the certainty the Clean Jobs Bill will bring to Illinois's renewable energy marketplace and labor force.  Our lobby day team, which also included another solar industry member and Illinois State University Renewable Energy student, had very engaging discussions with several legislators, including Rep. Thomas Bennett (R), Rep. Keith Sommer (R) Sen. Don Harmon (D), and Rep. Jay Hoffman (D), who agreed to also co-sponsor the bill.”

Like theirs, most groups had some success speaking to a portion of their assigned legislators about the Clean Jobs Bill. There were a lot of other very large groups lobbying but it was clear to me that our group was well informed and passionate, even though outnumbered.

Progress is slow in politics and this day proved no exception as we ran all around the capitol with delayed meetings. However, it was good to feel like our presence was appreciated and our legislators were interested in the importance of a clean energy economy for Illinois.  You can learn more about the Illinois Clean Jobs Bill and show your support even if you couldn't make it to Springfield. Click here to find out more.

The ISEA Policy webinar from Wednesday, April 29th, 2015 discussed updates and the basics of the Illinois Clean Jobs Bill, and how you can get involved next week at Solar Lobby Day!

Here are the powerpoint slides from last night's webinar on the Illinois Clean Jobs bill. View the video below. 

 

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.

The Illinois Solar Energy Association’s webinar, held on 2/25/15, outlined the IPA’s Regular and Supplemental  Procurements processes for Renewable Energy Credits from distributed solar energy systems in Illinois. The presentation is available both as a PDF as well as a recorded version (below).

It was a busy week in Springfield last week with the introduction of a new Renewable Portfolio Standard (RPS) bill and the news of Governor Rauner’s proposed 2015-2016 budget.  

The Clean Jobs Bill was unveiled Thursday (2/19/2015) with strong bi-partisan support in the House and Senate.  A growing coalition of business and special interest groups have joined forces to craft a unique and comprehensive clean energy bill to shape a better energy future. The goals are big, bold and urgent – increase statewide energy efficiency to 20% by 2025, ensure 35% of all power in Illinois comes from renewable sources by 2030 and set up a suggested framework for discussion to meet the new federal EPA carbon standards.  If passed, this could generate over 32,000 new jobs per year and attract more than $21B of investment in Illinois.  No other industry segment has that kind of potential in today’s economy! What is in store for solar energy specifically?

•  Replace the current RPS procurement plan with a new, independent procurement process that is not tied to the traditional annual IPA power procurement process.  Note that the existing Regular Procurement (April/Sept 2015) and Supplemental Procurement (June/Nov 2015, March 2016) will not be impacted by the new Clean Energy Bill.
• Identify stepping stones and targets for wind and solar (including DG, community and brownfield development), ensuring 25% RPS met by 2025 and 35% by 2030.  
• Shift utility contributions from the supply side (IPA/ARES suppliers) to distribution (ComEd/Ameren) through a line or wires charge.  This will fix the broken funding cycle in the current RPS and create a steady, predictable stream of revenue allowing for long term planning. 
• Develop a low-income family solar program through the targeted use of RERF dollars.  (Renewable Energy Resource Fund is the money from ARES suppliers for their compliance toward clean energy requirements and is the source of the $30M Supplemental Procurement.)  New contributions into this fund will cease in October 2016 and the outstanding balance will assist low income DG projects including community solar.  The first 15 years of RECs will be paid out once the system is energized and the utility will take ownership of the REC.  A 3rd party administrator will assure checks and balances against fraud. 
• Publish a DG “declining block” pricing structure for 2016 through 2030.  This table will identify MW goals with established declining REC prices, enabling investors to calculate and compare incentives over time.  This proven model has worked well in other state to drive steady growth and eliminate the boom/bust cycle that crippled early REC programs.  The Illinois Power Agency (IPA) will review/revise every two years to ensure pricing matches market conditions.  Investors will likely be paid for the first 15 year REC value once the system is energized.
• Require prevailing wage installation labor for new wind, and solar projects over 1000kW.

ISEA will be actively working to support this legislation and need each and every one of you to roll up your sleeves and help.  We intend to hire a lobbyist to work in Springfield on a regular basis and will host a series of events including Solar Lobby Day on May 6th - watch your calendar for details!  2015 will be a pivotal year for solar growth in IL and is your opportunity to pave a clean energy future, catapulting us to the top 10 solar states in the nation!
 
The Supplemental Procurement plan will host at least 3 events – June 2015, November 2015 and March 2016.  Prospective system owners will work through solar companies or aggregators to bid into one of these events.  It is important to keep in mind that the intended purpose of a REC is to assist with the economics of a project and encourage completed IL installations in order to achieve legislated goal of 25% clean energy by 2025.  Therefore, the value of a REC will need to be high enough to stimulate the market to grow and build.  It could also create an urgency to participate NOW! The rebate program was riddled with problems including limited funding, an onerous application period, an unpredictable lottery or competitive review and stressful installation deadlines.  By transitioning to the Supplemental Procurement, all of these problems are eliminated or improved:

• Immediate funding opportunities available in June & November & March.  No more “hurry up and wait” for the rebate/grant application deadlines to sign new customers.
• Flexibility in funding amounts on a project by project need.  One REC price does not fit all projects, installers and developers can tailor pricing to meet customer needs. (Keep in mind there will be a confidential (unpublicized) ceiling for pricing so all projects must be below this threshold to be approved.)
• Increased state budget from $2.5 million to $6 million ($30million/5 year REC contract).
• Improved odds for funding - elimination of the lottery system and competitive grant cycle! 
• Broader installation deadlines – no more November to May rush to install.  Approved projects have 6 months to be confirmed and a year to install. 

The one possible downside to this format is that the REC payment will be made quarterly as opposed to a single lump sum.  It may be a good idea to factor those related costs into your REC price to make the project economically viable and compelling enough to act now.  Several ISEA members have expressed concerns that previous market indicators suggested low REC prices.  However, do not dismiss the elimination of the rebate changes the economics for project owners.  Therefore, we believe the IPA will need to adjust the benchmark accordingly.  Aggregators may also look at market conditions to provide input and experience in national REC pricing but the experts will be the installers and ultimately the investors.  This will, in all likelihood, be a negotiation with the aim of installing the greatest amount of solar for the most cost effective price.  
 
Please note that ISEA will pursue opportunities to resurrect the rebate/grant program.  We are not ready to give up! However, indicators suggest it will be an uphill battle given the drastic cuts across the board to many human services and special interest groups.  We feel strongly that, if properly positioned, the Supplemental Procurement could be an excellent replacement to rebates and then transition smoothly to the declining block structure for the new RPS.  As stated previously we will need a great deal of support in Springfield from all members in order to secure a successfully incentive program that will drive growth through 2030! Please let us know we can count on you.
 

Written by Shannon Weigel

The Illinois Commerce Commission has released its Final Orders for both the Supplemental and Regular 2015 Procurement. ISEA participated in the supplemental procurement planning process on behalf of its business and individual members and advocated in favor of several features that the ICC integrated into the final approved plan. Here are a couple of important details potential participants should know:

Supplemental Procurement Plan
In 2014, the state legislature passed a bill to authorize the Illinois Power Agency (“IPA”) to spend up to $30 million from the Renewable Energy Resource Fund (RERF) for a supplemental distributed generation (“DG”) solar procurement (the “IPA Act”). The RERF is funded through payments made by Alternative Retail Electric Suppliers (“ARES”) to satisfy statutory renewable energy resource procurement obligations.

Eligible systems
The IPA has chosen to procure RECs from “new” DG solar systems. PV systems that have been energized on or after the approval date of the plan (January 21, 2015) are considered “new”. ISEA anticipates the IPA will accept countersigned interconnection agreements from the utility as well as a letter from system owners verifying the system was not energized prior to the approval date.

DG solar systems are defined as systems interconnected at the distribution system level of either an electric utility, ARES, municipal utility, or a rural electric cooperative; located on the customer’s electricity load; and limited in nameplate capacity to no more than 2,000 kW. This means all eligible systems will be located in Illinois.

Systems that participate, or have participated, in grant, incentive, rebate or tax credit programs may participate so long as that participation does not include the sale or assignment of RECs. Participation in the Department of Commerce and Economic Opportunity (“DCEO”) programs does not prohibit you from participating in the supplemental procurement. ISEA recommends double checking with funding sources to confirm ownership of RECs as some, such as the Illinois Clean Energy Community Foundation, may have taken ownership per terms of the award.

Procurement Process

The IPA has chosen NERA Economic Consulting as the Procurement Administrator. NERA will set up the bidding event and explain the competitive bidding process. Bidders will offer a competitive bid for a 5-year REC contract. A standard capacity factor of 14.38% will be used in the bidding process to forecast the number of RECs. Bidders will use the formula below to convert bid system sizes into deliverable RECs.

Nameplate Capacity in MW *14.38% *8760 hours/year * 5 years = contracted RECs

The IPA originally proposed two categories of systems: systems less than 25kW and systems between 25kW to 2,000 kW. ISEA argued that the two categories should be broken into three to ensure diversity of participation at cost-effective prices for mid-sized commercial systems. In the final plan, the IPA did break the procurement into three distinct categories: systems < 25 kW, systems 25 kW – 500 kW and systems > 500 kW – 2 MW. The IPA will set three individual and confidential benchmarks that will be applied across all procurement events. Per language from the General Assembly the IPA will strive to buy half of RECs from systems < 25 kW. (Note: this does not mean ½ the $30 million budget.)

Systems > 25 kW must be identified to prior to bidding. Bids may be speculative for systems < 25 kW. However, the systems must be identified within 6 months of the procurement event. The IPA states that evidence may include, but is not limited to, letters of intent, signed contracts, installation certification, site data and information, system ownership information, interconnection application and net metering application. 

Bidders must meet deposit requirements of $16/REC for speculative projects and $8/REC for identified projects. Half of the deposit is due at the time of bid submission and the other half is due within 14 days after bid acceptance. The IPA will refund winning bidders as part of the first payment for RECs. If a winning bidder cancels the project or fails to development milestones, the bidder will forfeit the deposit. Unsuccessful bidders will have their deposits refunded. The refund will be prorated for a bidder who is successful for only a portion of their bid.

Procurement Events

There will be 3 procurement events with the possibility of one contingency event in early 2017. 

June 2015

• Budget of $5 million
• <25kW Category: 5,000 REC maximum bid size
• 25-500 kW Category: No identified goals beyond those for the >25kW Category
• >25kW Category: 500 kW maximum system size

November 2015

• Budget of $10 million
• <25kW Category: No maximum bid size (targeting 50% of RECs in this procurement event)
• 5-500 kW Category: No maximum bid size (targeting 15% of RECs in this procurement event)
• >500kW Category: 2 MW maximum system size (targeting 35% of RECs in this procurement event)

March 2016

• Budget of $15 million
• <25kW Category: No maximum bid size for bids under 25 kW category
• 25-500 kW Category: No identified goals beyond those for the >25kW Category
• >25kW Category: 2 MW maximum system size for the 25 kW and above category

Early 2017 (contingency event)

• Balance of available funds
• Possible limitation on categories of systems that may participate

All bids must be at or below the appropriate confidential benchmark set by the IPA. Bids are then ranked in order of price per REC until all bids have been ranked or until the budget is exhausted. If that step ended because the budget was exhausted, in a next step, the lowest priced <25 kW systems that have not yet been ranked replace the highest priced >25 kW systems as needed to reach the objective of having 50% of the RECs for the procurement event from systems <25 kW. For the second procurement event, if needed, the same process is used to bring the >25 kW - 500 kW category up to 15% of the RECs.

If your bid is selected

Bidders might win contracts for only some of their projects. Installers must build systems within 12 months of the procurement, with a potential 6 month extension, granted at the IPA’s discretion. Systems must be installed by a “qualified person” and the bidder must certify that a qualified person was used for the system installation. Per legislative language as modified in the IPA Act, the definition of “qualified person” is slightly different than that required by the ICC for DG Certification. See reference below. 

The winning bidder may request to substitute a system with one or more systems so long as the total size is of similar nameplate capacity. The IPA has the discretion to grant or deny substitution requests. 

Systems > 25 kW will be required to have a revenue-quality meter as part of their installation. The Commission decided it is the IPA’s discretion as to what meters are required for < 25 kW systems. Both the IPA and Commission have stated they do not want to add unnecessary costs to < 25 kW systems and unintentionally create a barrier to participation. Additional details will be provided during the next few months.

RECs must be delivered via GATs or M-RETs tracking system and transferred to the IPA’s account prior to invoicing. Bidders will invoice IPA quarterly and IPA will pay after RECs are delivered. 

Next Steps

The IPA will draft procurement documents for stakeholder comments and hold informational sessions. Per ISEA’s suggestion, the IPA will develop a webpage similar to “Plug in Illinois” to provide basic information to potential participants.

2015 Regular Procurement Plan 

The IPA will also procure, on behalf of the utilities, SRECs from new and existing systems through two energy procurement events in 2015. This is technically how the REC procurement event had been intended to work and was triggered by the need to purchase standard electricity for Ameren. Any year that the IPA purchases conventional power for the utilities they are also required to purchase renewable energy per the IPA Act. Given the small budget amounts and that the solar market is behind previously stated targets, the IPA has elected to focus the 2015 procurement solely on solar asset procurement and will not be purchasing wind RECs in the plan. 

The first procurement event will occur in April 2015. The procurement will use about $13 million from the Renewable Resources Budget (RRB) for a one-year SREC contracts. Participants will likely be utility-scale existing systems with unsold RECs. 

The second procurement event will be in September 2015 for RECs from DG resources. DG resources are defined as systems interconnected at the distribution system level of either an electric utility, ARES, municipal utility, or a rural electric cooperative; located on the customer’s electricity load; and limited in nameplate capacity to no more than 2,000 kW. By definition, all systems will therefore need to be installed in Illinois. Half of the RECs will come from systems < 25 kW.

The utilities will purchase about $15 million from the Hourly ACP fund. Contracts will be for 5 years, paid annually beginning at the date of the first meter read registered in the appropriate tracking system. Successful bidders have until June 2016 to complete the system installation. 

Bidders must aggregate projects to a minimum bid of 1 MW. Aggregators and system owners can combine projects < 25 kW and > 25 kW to meet the 1 MW threshold. A bidder can designate REC prices specific to individual systems. Within the 1 MW bid, the IPA may award all, none or some systems. No speculative bidding is allowed. Bidders must submit a non-refundable $500 bid fee and a $10/REC refundable deposit.

Qualified Person– definition per Section 1‐56(i)(1) 

For the purposes of this paragraph (1), "qualified person" means a person who performs installations of photovoltaics, including, but not limited to, distributed photovoltaic generation, and who: (A) has completed an apprenticeship as a journeyman electrician from a United States Department of Labor registered electrical apprenticeship and training program and received a certification of satisfactory completion; or (B) does not currently meet the criteria under clause (A) of this paragraph (1), but is enrolled in a United States Department of Labor registered electrical apprenticeship program, provided that the person is directly supervised by a person who meets the criteria under clause (A) of this paragraph (1); or (C) has obtained one of the following credentials in addition to attesting to satisfactory completion of at least 5 years or 8,000 hours of documented hands-on electrical experience: (i) a North American Board of Certified Energy Practitioners (NABCEP) Installer Certificate for Solar PV; (ii) an Underwriters Laboratories (UL) PV Systems Installer Certificate; (iii) an Electronics Technicians Association, International (ETAI) Level 3 PV Installer Certificate; or (iv) an Associate in Applied Science degree from an Illinois Community College Board approved community college program in renewable energy or a distributed generation technology.

For the purposes of this paragraph (1), "directly supervised" means that there is a qualified person who meets the qualifications under clause (A) of this paragraph (1) and who is available for supervision and consultation regarding the work performed by persons under clause (B) of this paragraph (1), including a final inspection of the installation work that has been directly supervised to ensure safety and conformity with applicable codes.

For the purposes of this paragraph (1), "install" means the major activities and actions required to connect, in accordance with applicable building and electrical codes, the conductors, connectors, and all associated fittings, devices, power outlets, or apparatuses mounted at the premises that are directly involved in delivering energy to the premises' electrical wiring from the photovoltaics, including, but not limited to, to distributed photovoltaic generation.

 

 Learn about both the Illinois Regular and Special Renewable Energy Procurements. 

 

Lisa Albrecht ISEA's Policy Committee Chair explains the difference between the procurements and how they will impact Illinois solar development in 2015. 

 

2014-12-18 18.05 Illinois Solar Policy Update.wmv

 

Regular Procurement Final Order:  http://www.icc.illinois.gov/docket/files.aspx?no=14-0588&docId=222864

 

 

Supplemental Procurement Proposed Order : https://www.icc.illinois.gov/docket/files.aspx?no=14-0651&docId=222439

As you know, the state legislature passed a measure to authorize the IPA to spend $30M of the Renewable Energy Resource Fund (RERF) for a special DG Solar Procurement.  The IPA held several public workshops and published a draft procurement plan, soliciting comments at each stage.  On October 28^th, the IPA submitted the final version for ICC consideration and final rulings by the ICC are due January 26, 2015.  ISEA was pleased to see many of our recommendations incorporated in this latest version.  (Click here to access draft plans and all comments filed to the IPA and ICC.)  Please note that this procurement is being developed at the same time as the Regular Procurement Plan, discussed in previous blogs.  This is a separate process with different targets and goals.

The final version of the Special Procurement Plan has been filed for consideration with the ICC.  Overall provisions include:

• The IPA will hold a competitive procurement among aggregators offering 5 year contracts only for “new” Distributed Generation (DG). DG includes all systems <2,000kW and are installed behind the meter and less than 2 MW. Due to the “behind the meter” requirement, only Illinois systems will be eligible.
• “New” means the system is energized on or after the approval of the plan (likely January 26, 2015).  Systems must be built within 1 year of the procurement with a potential 6 month contingency if project experiences delays. 
• A standard capacity factor of 14.38% will be used in the bidding process to forecast the number of RECs per KW of installed solar.  For example, for bidding purposes, RECs for a 10kW system would be calculated:  (0.010MW x 14.38% x 8760 hours/year x 5 years = about 63 RECs.  Bidders would use this formula to convert bid system sizes(nameplate KW) into deliverable RECs. As all contracts will be for 5 years, RECs should be bid for the duration of the contract.
• The procurement events will feature two bid categories – systems under 25 kW and systems over 25 kW. The IPA will strive to buy half of the RECs from each group.  Only projects in the <25kW system can include speculative projects.  Projects >25kW must be identified but not energized.  The IPA will create the ability to gather this information during the bid process.  
• There will be 3 different procurements (see below) with a minimum bid amount of 500 RECs.  Bids will be accepted by aggregators or system owners as long as the minimums are met. Therefore larger commercial systems will be able to self-procure if so desired.
•  Aggregators cannot exceed the maximum bid of 5,000 RECs for <25kW systems in any procurement period. As stated previously, bids can be speculative in this portion of the Special Procurement.  However, speculative projects must be identified within 6 months (3 month contingency) of the procurement event.
• All projects in the >25 category must be identified (i.e. site control, etc) in order to bid.
• Aggregators can bid in a different REC price for each project, but not different REC prices within the project, and for commercial systems you have to bid all the RECs from the system.
• Eligible systems must be installed by a Qualified Person. This definition differs slightly from the current ICC definition of “Qualified Person”.  Aggregators and/or projects will need to verify that the system was installed accordingly.  If not, the project will not be eligible to sell RECs.  (see definition below)  As this was defined specifically by the General Assembly in Section 1-56(i) the ISEA was unable to alter these terms. 
• Systems must be registered with PJM GATS or MISO M-RETS where all RECs will be tracked and transferred.  All systems will be required to have a utility-grade meter as part of their installation.
• Aggregators will be required to meet deposit requirements of $16/REC for speculative projects and $8/REC for identified projects.  Deposit adjustments will be made as speculative projects are identified.
• Commercial projects can substitute projects if they meet the same criteria of the project that won the award.
• Bidders might only win contracts for some of their projects.  Deposits will be adjusted accordingly.
• There will be 3 procurement events with a possible 4^th contingent upon need.  

June 2015 –

•  Procurement Budget:  $5 M
• Maximum bid of 5,000 RECs for residential.
• Bids for commercial but systems can’t be over 500 kW

November 2015-

• Procurement Budget:  $10 M
• Maximum bid of 5,000 RECs for residential.
• No maximum bid for commercial and systems can be up to 2 MW now 

March 2016

• Procurement Budget:  $15 M
• Maximum bid of 5,000 RECs for residential.
• No maximum bid for commercial and systems can be up to 2 MW now 

January 2017-  Contingency for any remaining money.

 

ISEA objected to the following issues in the final 2015 Special Procurement Plan:

1. Systems between 25kW – 2,000 kW should be broken into smaller sub-categories to ensure that the financial incentives to develop varying sizes work appropriately.  ISEA recommended 25kW – 399kW and 400kW – 2,000 kW.  This has not been supported to date but ISEA provided evidence that mature REC markets have been making these adjustments based on development results.  This is a vast economic opportunity for system owners, developers and installers. 
2. Systems <25kW should utilize a 3^rd party administrator as opposed to a multipleaggregators which could cause a great deal of confusion for system owners. The easier this process is for homeowners and small business owners, the more likely they are to participate.  We do not want complex competition to cause market confusion and potential delays.
3. Aggregator Credit Requirements should be reduced to:  $10/REC for speculative bids, $5/REC for identified projects to open the field of potential bidders for REC procurement.
4. ICC DG Certified Installers list needs to include additional details so that it is transparent if an installer qualifies for the Special Procurement.   NOTE:  This is an important distinction that all solar installers should investigate further and take the necessary steps to ensure they will qualify under the new guidelines.  This requirement is limited to just RECs from the Special Procurement and does not impact systems that do not seek to sell their RECs or for systems that intend to participate in the Regular Procurement.

 Qualified Person – definition per Section 1‐56(i)(1)    

For the purposes of this paragraph (1), "qualified person" means a person who performs installations of photovoltaics, including, but not limited to, distributed photovoltaic generation, and who: (A) has completed an apprenticeship as a journeyman electrician from a United States Department of Labor registered electrical apprenticeship and training program and received a certification of satisfactory completion; or (B) does not currently meet the criteria under clause (A) of this paragraph (1), but is enrolled in a United States Department of Labor registered electrical apprenticeship program, provided that the person is directly supervised by a person who meets the criteria under clause (A) of this paragraph (1); or (C) has obtained one of the following credentials in addition to attesting to satisfactory completion of at least 5 years or 8,000 hours of documented hands-on electrical experience: (i) a North American Board of Certified Energy Practitioners (NABCEP) Installer Certificate for Solar PV; (ii) an Underwriters Laboratories (UL) PV Systems Installer Certificate; (iii) an Electronics Technicians Association, International (ETAI) Level 3 PV Installer Certificate; or (iv) an Associate in Applied Science degree from an Illinois Community College Board approved community college program in renewable energy or a distributed generation technology.

For the purposes of this paragraph (1), "directly supervised" means that there is a qualified person who meets the qualifications under clause (A) of this paragraph (1) and who is available for supervision and consultation regarding the work performed by persons under clause (B) of this paragraph (1), including a final inspection of the installation work that has been directly supervised to ensure safety and conformity with applicable codes.

For the purposes of this paragraph (1), "install" means the major activities and actions required to connect, in accordance with applicable building and electrical codes, the conductors, connectors, and all associated fittings, devices, power outlets, or apparatuses mounted at the premises that are directly involved in delivering energy to the premises' electrical wiring from the photovoltaics, including, but not limited to, to distributed photovoltaic generation.

 

 

Objections can be found on the ICC website. The ISEA intends to file Responses to the Objections (due 11/20) and likely Replies to the Responses (due 12/2)

by Lisa Albrecht, ISEA Policy Co-Chair

A lot has been happening since the last Blog!

Many may not realize but there are currently two separate procurement plans in the works to purchase Renewable Energy Credits in 2015; the Special Procurement which we’ve discussed in previous posts, and the Regular Procurement which is part of the standard annual energy procurement the IPA hosts on behalf of the utilities.   Both plans are still in draft form and we are working hard to try to negotiate a solution that will best serve all aspects of the solar industry.

I’ve detailed both the Regular and Special Procurements below but also wanted to explain the process each procurement goes through legally.  The ISEA has participated in each of the following steps:

1. The IPA holds public workshops when writing a new procurement plan.
2. This input is used to create a Draft Plan which is published for public comment.
3. The public has 14 days to submit informal comments on possible changes.
4. Once received, the IPA then has 14 days to revise before submitting the final Plan to the ICC.
5. Fortunately it doesn’t end there and interested parties have a chance to file legal “Objections” within 5 days.  These are filed by an attorney directly with the ICC and posted on the ICC website.
6. Entities have the opportunity to submit “Responses to Objections” filed, either in agreement or opposition, and make a detailed case for their response. These are due within 10 days.
7. There is one final opportunity to file “Responses to the Responses to the Objections” over the next 10 days.
8. At that stage the comment period ends.  The ICC takes all of these comments under advisement and must either confirm or modify the plan 90 days after it was filed by the IPA.

All of this is VERY CONFUSING so we will be hosting a webinar soon to go over the details. For perspective, it helps to understand there are 3 buckets of funding (remember when we were working on the RPS Fix?) 

1. The Renewable Resource Budget (RRB) – the public utilities calculate their required %’s from fixed rate customers.
2. The Hourly Alternate Compliance (ACP) Budget – the public utilities calculate their required $’s from hourly rate customers
3. The Renewable Energy Resource Fund (RERF) – the Alternate Retail Energy Suppliers required offset. 

The Regular Procurement will be spending funds from the RRB and the Hourly ACP budgets.  This is ComEd and Ameren’s portion of the Renewable Portfolio Standard.  The Special Procurement will be spending funds from the RERF budget.

We encourage you to look at the proposed plans but here’s a quick snap shot of where we are at this point.  Please keep in mind that both Plan’s are still in draft mode and the ICC will make final determinations in about 90 days. 

Regular Procurement – this is the furthest along in process above and on 10/31 ISEA will be submitting our “Response to the Responses to the Objections”.  From there we wait until 12/29 to see what the ICC finalizes.   The utilities will enter into contracts to purchase RECs from Aggregators.  There will be 2 procurements to purchase credits from existing and new systems under contract:

1. April 2015:  The utilities will purchase about $13m from the RRB for single-year RECs.  These will likely be existing systems that have unsold RECs and will likely be utility scale or out of state RECs. ISEA has objected.
2. September 2015: The utilities will purchase about $15m of the Hourly ACP) funding.
   1. The goal is to purchase half of the RECs from >25 kW systems and half from < 25 kW systems. This is half the REC’s not half the budget but until there is pricing we won’t know the quantity.
   2. No speculative bidding will be allowed and only specifically identified systems will be accepted in bids. Unbuilt systems have until June 2016 to be completed. 
   3. Contracts will be for 5 years.  They will not be prepaid in a lump sum.
   4. Aggregators are required to submit a Minimum bid of 1 MW of bundled capacity. Bidders can combine projects from >25 kW projects and <25 kW projects to meet the 1 MW threshold.
   5. Aggregators will be required to submit a non-refundable $500 bid fee.  They will also provide a $10/REC refundable credit deposit based on the # of RECs bid. 
   6. The contracts will be between utilities and aggregators.  System owners can self-aggregate if they meet the 1 MW minimum threshold. Otherwise an aggregator is just a third party – solar company, REC aggregator, municipality, non-profit – whoever has contractual rights to sell the RECs.

Special Procurement – the IPA will be submitting their final Plan to the ICC on Monday 10/28.  I hesitate to list details as we are hoping for significant edits but do so because we’ve received several questions and concerns.  Again, I encourage folks to read the plan which is hot linked above.  The draft plan suggested:  

General Provisions:

• All bids must be for systems <2,000kW (Distributed Generation or DG systems). DG RECs as defined by Illinois statute mean they must be interconnected in Illinois, behind the meter, and used primarily to offset the customer’s usage.
• All projects must be “new” as defined by the date of each of the procurements (see below). No existing systems will be able to participate.  ISEA has strongly objected to the definition of the term “new”, arguing that “new” should be systems installed on or after the date the Governor signed the bill into law.
• No speculative bidding from large systems, ever. Bidders will need proof of viability of large systems, though the exact details aren’t spelled out.
• All systems must be installed by a “qualified person” which is not part of the regular procurement.  The General Assembly included wording that restricts the state definition of “qualified person” and we cannot change it.  Systems built by installers who used “5 installed systems” as their qualification will be excluded from participating in the Special Procurement. 
• Basically a bid will be for 1 REC/year/kW. So a 5 kW system will bid 25 RECs for the entire 5-year period and a 2 MW system = 10,000 RECs. 
• The winning bidders will invoice the IPA quarterly and payment will be made after the RECs are delivered (i.e. no pre-payment).
• Bidders will have to provide $25/REC deposits for speculative RECs and $10/REC deposits for identified systems. This translates into $125/kW for speculative bids or $50/kW for identified projects.
• Aggregators are not necessary but allowed:
• • System owners can participate directly as long as they meet credit and minimum bid requirements (500kW).
  • Anyone can be an aggregator as long as they have the right to sell the RECs from projects, meet credit requirements, and meet minimum bid requirements. You will need to pre-qualify.

• There will be 3 procurement events with a 4^th if needed:

June 2015: $5 million

• System is energized on or after June 2015 procurement date
• Under 25 kW systems: minimum bid of 500 RECs (20 5 kW systems) and a maximum bid of 5,000 RECs (200 5 kW systems)
• Over 25 kW systems: minimum bid of 500 RECs (4 25 kW systems) and a maximum systems size of 500 kW, meaning a maximum per-project bid of 2,500 RECs.

November 2015: $10 million

• System is energized on or after June 2015 procurement date.
• 500 REC minimum bid, no maximum system size.

March 2016: $15 million

• System is energized on or after November 2015 procurement date.
• 500 REC minimum bid, no maximum system size.

Early 2017: contingency