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Locally approved solar projects still require utility, revenue authorization

Locally approved solar projects still require utility, revenue authorization

Solar panels are seen March 28 in McHenry.
Solar panels are seen March 28 in McHenry.

Whether it’s a plan to develop a solar farm on 41 acres in Alden Township or a proposal to install solar arrays across the Huntley school district to offset millions of dollars in carbon emissions, solar projects are gaining momentum in McHenry County.

Some have even gained approval from their respective governing body, such as a proposal from PIRHL Developers to install 123 solar panels on the southwestern portion of a planned senior living facility in Cary and a plan from Borrego Solar Systems Inc. to build a 2-megawatt solar farm in Woodstock.

But once a project gains the initial approval from a municipality or the county, there still are a few hurdles that must be overcome in order to break ground.

Revenue

In 2017, the General Assembly passed the Future Energy Jobs Act, which created strong new development targets for wind and solar projects.

The overall statewide budget for these projects is about $200 million a year spread between wind and solar projects, which comes from customers’ electric bills. Rates are capped to ensure programs are cost-effective and customers’ utility rates are not significantly affected.

The process for taking advantage of solar renewable energy credits, which show a certain amount of electricity was produced using solar energy and often are a necessary incentive for solar proposals, varies depending on the size of the solar power project.

For utility-scale projects, which typically generate at least 2 megawatts of power, the Illinois Power Agency – an independent agency responsible for developing electricity procurement plans – performs a competitive procurement process where energy companies can submit bids for a desired incentive.

A 2-megawatt solar project at IKEA Joliet was estimated to power 293 Illinois homes, according to data from the Solar Energy Industries Association. However, factors such as average sunshine, average household electricity consumption, temperature and wind can influence power generation.

The lowest bidders then will sign a long-term contract with a utility company. Bids can come from states adjacent to Illinois, but these projects have to meet certain public interest criteria to be eligible.

IPA already has performed a couple of these requests for proposal and intends to do another one in October.

For smaller community solar projects, the IPA is working to develop an Adjustable Block Program that will offer a set price for the purchase of renewable energy credits via 15-year contracts from qualifying projects.

Bradley Klein, senior attorney with the Environmental Law and Policy Center, said one potential setback from this is because there is likely to be more interest in these new state programs than there will be money available – at least in the short-term – the IPA likely will have to make determinations on which projects are funded first through the Adjustable Block Program.

One such solution the IPA is considering is a lottery-based system.

If this were to be enacted, Klein said, it would not stop eligible projects from receiving funding.

“These are going to be long-term programs, and we do expect everybody to participate even if they aren’t selected as one of the first programs to receive funding through a lottery,” Klein said.

IPA has set a target date of mid-January to have all the details from these programs finalized and begin accepting applications. After 14 days have passed, the IPA will evaluate the number of proposals that have been received and determine whether a lottery would be necessary.

Interconnection

All solar energy projects are required to interconnect to the electric utility grid, but based on factors such as location and estimated output, not all projects may be able to reach an agreement with a utility company such as ComEd.

“Each project has to be studied to determine if it can be safely interconnected and determine the types of work that would need to be done,” Klein said.

Engineers will study each proposal to determine whether a solar project may require upgrades or whether it is economically viable to set up a solar array based on interconnection costs.

Scott Vogt, vice president of energy acquisition at ComEd, said there are currently more than 1,000 generator interconnection requests in ComEd’s interconnection queue, representing nearly 1.5 gigawatts of capacity. This includes 600 community solar projects seeking to participate in IPA’s potential lottery.

“Although the level of interest in solar, particularly in Community Solar, has resulted in significantly higher number of applications than originally anticipated, ComEd is committed to processing all interconnection requests – current and future – in a timely manner in accordance with Illinois regulatory requirements,” Vogt said.

Community solar developers who submitted complete applications by June 15 and have provided all necessary information and agreements on time will be tendered an interconnection agreement in time to participate in the lottery, Vogt said.

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