This past month, Sol Systems participated in the most highly anticipated event of the summer. If you’re thinking, “Jurassic World 3-D,” then you haven’t been following recent developments out of Illinois’ SREC procurement process. The June auction marked the first of three auctions intended to jumpstart Illinois’ solar market. Sol Systems participated as an SREC aggregator, and the results are in.
In this and future rounds of procurement, the Illinois Power Agency (IPA) purchased SRECs from suppliers using the Illinois Renewable Energy Resources Fund, into which utilities pay to support the development of renewables. In order to better facilitate the growth of distributed generation, the IPA procured half of the SRECs from systems less than 25kW and half from systems between 25 and 500kW.
With an average winning bid price of $168.58/SREC, small residential systems less than 25kW were slightly better-off than larger commercial systems. Notably, for systems smaller than 25kW, the IPA allowed “speculative” bidding, which accounts for SRECs generated by projects still in development. Although a majority of bids in the sub-25kW category were speculative, this allowed a more diverse group of developers to participate in the procurement and helped the IPA reach its goal of a 50/50 system size split.
So what’s next for the Illinois solar market?
A lot. For starters, the next two SREC procurement events will be in November 2015 and March 2016, and each will be bigger and badder than the one before it. With $10 million and $15 million at its disposal in each of the next two auctions, the IPA will be able to buy more SRECs and from larger systems (the upper limit in system size extends to 2MW for the next two events).
These procurement events likely won’t be the last, either: Illinois’ solar carve-out is currently set at 6% of its steadily increasing renewable portfolio standard for each of the next 10 years, offering promising stability for customers, installers, and financiers. As the volume requirements continue to increase, the IPA may continue using SREC procurement events to help utilities meet the benchmark.
Playing the long game
Enter the Illinois Clean Jobs Bill, which if passed this fall, would establish a long-term renewable energy procurement plan and set Illinois on a path of sustained and exciting solar growth. Its key provisions would extend the state’s renewable portfolio standard to 35% by 2030, ramp up its solar carve-out to mandate SREC purchases from new PV installations, and establish community and low-income solar programs designed to increase access to solar energy. Not only that, but the Clean Jobs Bill would position the state well to comply with the U.S. Environmental Protection Agency’s Clean Power Plan, which is expected to go final by the end of the summer.
With its successful first procurement event, at least two more on the horizon, and game-changing legislation on the docket, Illinois is emerging as a major player in the national solar market. Installers, for more information on how to get involved in the Illinois procurement, please contact Eric.firstname.lastname@example.org.
ABOUT SOL SYSTEMS
Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for 262MW of distributed generation solar projects on behalf of Fortune 100 corporations, insurance companies, utilities, banks, family offices, and individuals. Sol Systems provides secure, sustainable investment opportunities to investor clients, and sophisticated project financing solutions to developers. The company’s tailored financial services range from tax structured investments and project acquisition, to debt financing and SREC portfolio management. For more information, please visit www.solsystems.com.