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Opportunities in Illinois
Illinois ranks 16th among the contiguous states in wind energy development potential
(Pacific Northwest Laboratory 1991), and as discussed in Chapter 2, there are several areas of the state with good wind resources, specifically a total of 6,790 km2 with 6,980MW of potential wind energy. This, coupled with a number of strong incentives and programs available in Illinois, makes the state an attractive place for wind development.
Many factors have helped Illinois establish several solid incentive programs for renewable energy, including state policies, utility initiatives, and consumer demand.
State Tax Incentives
Special Assessment for Renewable Energy Systems
Illinois has a property tax provision that provides for a special assessment of renewable energy systems. Renewable energy equipment is valued at no more than conventional energy system equipment. The special assessment provision applies to passive solar space heat, solar water heat, active solar space heat, photovoltaics, wind, and geothermal electric equipment in industrial, commercial, and residential sectors.
Other Financial Incentives and Funding Programs
Net Metering
Illinois does not have a statewide net metering law, but the state's largest utility, ComEd, an investor-owned utility serving the city of Chicago and surrounding areas, implemented a limited net metering program in 2000. The program allows for net metering of wind and solar electric systems of 40 kW or less and is available to all customer classes. Enrollment is limited to installed capacity of 0.1 percent ComEd's peak annual demand. The utility will purchase net excess generation at avoided cost on a monthly basis. Then, to make up the difference between the avoided cost rate and the retail rate, ComEd will make an annual payment to participants calculated by multiplying the difference in price by the number of kilowatt-hours provided by the customer to the utility. This payment system requires the use of dual meters, thus ComEd has agreed to pay the cost of reading and installing the additional metering equipment needed. A small wind turbine owner who is taking advantage of this program is profiled in Part IV of this handbook.
Renewable Energy Resources Trust Fund
This $250 million public benefits fund for renewable and energy efficiency was created in 1999 as part of a settlement between the State of Illinois and ComEd that allowed
ComEd to merge with PECO Energy of Pennsylvania. The fund was established with a one-time payment from ComEd and is administered by the Illinois Clean Energy Community Foundation (described below). Funds are to be used only on projects within Illinois that demonstrate a benefit to the state's environment or economy. Most of the fund ($200-$225 million) is slated for renewable and energy efficiency programs, but at least $25 million must be used on clean coal programs.
Illinois Clean Energy Community Foundation
ICECF is an independent, nonprofit, grant making foundation created with authorization from the Illinois legislature. The foundation supports efforts and projects that protect and improve the environment in Illinois. ComEd, the state's largest electric utility, provided ICECF's $225 million endowment. The foundation's three main goals are (1) to increase energy efficiency, (2) to expand the use of renewable energy resources, and (3) to preserve and enhance natural areas and wildlife habitats throughout Illinois. Financial support for programs focused on these goals is distributed through a competitive grant making process. Nonprofit organizations, local and state government agencies, and educational institutions are eligible for grants as are some businesses planning charitable projects. Individuals are not eligible. Grants relating to renewable energy range from market development and policymaking projects to demonstration projects and installation of small wind turbines. For details on eligibility, current funding priorities, and how to apply, contact:
ICECF
2 N. LaSalle Street, Suite 950
Chicago, IL 60602
(312) 372-5191
Fax: (312) 372-5190
www.illinoiscleanenergy.org
Renewable Energy Resources Program
RERP was established to promote investment in, development, and use of renewable energy within the State of Illinois. The program focuses on fostering increased utilization of renewable energy technologies, including wind, solar thermal energy, photovoltaic systems, dedicated crops grown for energy production, organic waste biomass, hydropower that does not involve new construction or significant expansion of hydropower dams, and biogas stationary fuel cells. As the most market-ready and cost competitive renewable energy technology available, wind energy could benefit greatly from this program. Funding for RERP comes from the Renewable Energy Resources Trust Fund described above and the program is administered by the Illinois Department of Commerce and Economic Opportunity. Funds are available in two categories:
(1) the Renewable Energy Resources Grant Program for a wide range of renewable energy technologies and (2) the Renewable Energy Resources Rebate Program, which is aimed more specifically at nonprofit entities, government, and individuals installing solar energy systems.
Renewable Energy Resources Grant Program
Specific guidelines for this program change from year to year, so it is important to carefully review the latest information available. According to guidelines released for fiscal year 2004, the grant program is available for wind systems with 5 kW-2,000 kW of nameplate capacity under the following guidelines: (1) wind projects from 5 kW to 200 kW can receive up to 50 percent or up to a maximum of $2.00 per watt with a maximum grant of $50,000; and (2) wind projects between 201 kW and 2,000 kW can receive up to 30 percent of the project costs with a maximum grant of $500,000. In previous years, even larger wind projects were eligible. Grant funds are only available for equipment and installation expenses, and projects must be located within the State of Illinois. This means grants will not cover project development expenses such as legal fees and feasibility studies. To be eligible, applicants must be customers of an electric or gas utility that imposes the Renewable Energy Resources and Coal Technology Development Assistance Charge. A list of participating utilities is included in the program's "Guidelines and Application," which are included as Appendix II in this handbook.
The Illinois Department of Commerce and Economic Opportunity will evaluate applications based on the cost-effectiveness and economics of proposed projects, feasibility, economic development potential, and public education benefits. Only one grant may be issued for each applicant, entity, or project, and applicants for wind projects 201 kW or greater must provide one year of "professional meteorological data collected at appropriate altitudes." Projects up to 200 kW must also provide some wind resource justification or site-specific data. (Please see Chapter 2 for ideas on how to obtain wind resource information.)
As of July 2003, the Illinois Commerce Department reported that there have not been large numbers of applications for these grants yet. Under previous grant guidelines, there were fewer than five applicants for projects over 10 MW, no applicants for projects between 1 and 10 MW, and less than ten applicants for projects under 1 MW. Two wind projects (one small and one large) that benefited from this program are profiled in Part IV of this handbook.
For questions about the application or eligibility requirements, contact:
Rex Buhrmester, Project Manager
Illinois Department of Commerce and
Economic Opportunity
Bureau of Energy and Recycling
Alternative Energy Development Section
620 E. Adams Street
Springfield, IL 62701-1615
(217) 557-1925 or (800) 785-6055
State Green Power Purchasing
In 2002, former Illinois Governor George Ryan issued an executive order giving the state a goal to purchase green power for at least 5 percent of the electricity used by buildings owned or operated by agencies under the Governor's control by 2010. The amount of renewable energy purchased will grow to at least 15 percent by 2020. The executive order defines green power as electricity generated from renewable sources such as wind, solar, organic wastes, and hydropower. It excludes the burning of municipal solid waste, wood waste, or tires.
City of Chicago Green Power Purchasing
Two years before the state government committed to buying green power, the City of Chicago joined with 47 other local government bodies in a green municipal aggregation effort. Together, the group uses about 400 MW of electric power and plans to have 20 percent (about 80 MW) of it come from green power by 2005. In 2001, the group chose ComEd to provide the green power. The government agencies involved in this purchase are taking advantage of 1997 legislation that established a competitive electricity market in the state.
Renewables Portfolio Goal
Illinois passed legislation in 2001 creating a statewide goal of having 5 percent of the state's energy production and use be derived from renewable sources by 2010 and 15 percent by 2020; however, no enforcement or implementation provisions were included
(e.g., an implementation schedule, a method of compliance verification, or a credit trading system). In 2003, the Illinois legislature is debating whether to make this goal a standard. Other states with firm commitments to renewable energy lead the U.S. in installed capacity and have established thriving markets for renewables.
Important Information About Small Turbine Projects
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