Current Illinois law requires its public utility companies to source 25% of their energy from renewable energy sources by 2025. To achieve this goal, Illinois’ largest utilities are making incentive payments to homeowners and businesses who invest in new Solar Photovoltaic (“PV” Systems.
These incentive payments, referred to as “SREC Payments”, are based on the estimated electric energy that will produced in the first 15 years of a new Solar Photovoltaic (“PV”) System. Once the application process is complete with all documents finalized and the PV system installed and operational – incentive payments are expected within 15 months (full payment for small block/residential and 20% for large block/commercial with 16 additional quarterly payments).
Have your cake….and eat it too!
Illinois PV system owners not only get these advance payments for future energy produced, but also begin immediately reducing their electric bill on the first day of a new PV system service by using energy they produce and getting credit on additional electricity they generate.
In addition to these benefits, all new Illinois PV system s are eligible for the longstanding federal solar tax credit that for 2019 is 30% of the system’s cost.
SREC’s are calculated by beginning with the Solar Photovoltaic (“PV”) Systems’s electric production estimated for the first year. Because over time all solar panels experience degrees of degradation (from long hours in direct sunlight) all subsequent year’s electric production is slightly adjusted down by 2% for year two and .25% per year thereafter). Once degradation is factored in and the total electric production for 15 years is summed, this number is divided by 1,000 and the result is the 15 year SREC total.
Calculating the SREC Incentive Payment
The rates at which the SREC incentive payments are figured are based on a published schedule that is charged by group, category, and block. Each one of these has multiple blocks but they all have limited funding and incentive rates that decrease with each block’s rate until all blocks have been depleted and the incentive ends. The rate to use will be determined by factors including your utility company, size of your PV system, and what block is active.