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| Shedd Aquarium officials Roger Germann, from left,
Bob Wengel and Mike Delfini show its rooftop solar panels, projected to shave $25,000 to $30,000 a year from its electricity bill. (Terrence Antonio James, Chicago Tribune) |
Shawn Temple, a development director for Weston Solutions, said he has manufacturers, grocery chains and retailers interested in erecting solar panels along large swaths of abandoned industrial sites in Chicago.
"We have lots of clients and sites available," Temple said.
But those companies are building large-scale projects in other states because they can't make the math work in Illinois.
A glitch in the wording of a state law has prevented solar power from being purchased for Illinois electric customers even though they are paying into a fund for that purpose. What's more, the state has yet to create a market for trading renewable energy credits, vastly extending the time it takes for solar power producers to recoup construction costs.
No chief financial officer is going to sign off on a big solar project without financial incentives, Temple said. "It needs to pass the CFO test."
The incentives are especially crucial, given Illinois' lack of sunny days and low electricity prices.
As a result, virtually none of the power flowing to Illinois electricity customers comes from the sun, despite aggressive statewide mandates that require increasing the number of homes and businesses supplied with renewable energy such as solar.
So far, $53 million has been paid into a fund by Illinois electricity customers. But the law allows the money to only be spent at the same time that power is being purchased for Commonwealth Edison and Ameren Illinois customers. But those utilities have more power than they need because most of their customers fled for cheaper alternative suppliers.
So the pot of money just sits.
A legislative fix would allow the agency that procures power to spend that money on behalf of all Illinois electricity users, regardless of whether they remain with their legacy utility. The fix was expected last week but was postponed after the Illinois Competitive Energy Association, a lobby arm of alternative energy suppliers, claimed that such a move would drive up electricity prices.
Sen. Don Harmon, D-Oak Park, who is sponsoring the legislation that would fix the law, said last week that the issue will be taken up after the veto session.
Illinois patterned its renewable energy market after New Jersey, a state that has made up for its dearth of sunshine and low electricity prices by paying well for renewable energy credits.
"On paper we have great incentive for people to invest in solar here," said Sarah Wochos, senior policy advocate and director of research for the Environmental Law & Policy Center in Chicago. "But there's some structural flaws in the mechanics of the law right now that make it impossible for those investments and that growth to happen here."
In the meantime, experts say, solar development in Illinois has been the exception rather than the rule.
"These are customers that really wanted to make it work in Illinois for one reason or another that went beyond the pure economics of the project," said Madeleine Klein, senior vice president of policy and strategy for solar rooftop developer SoCore Energy, a subsidiary of Edison International.
For example, SoCore Energy developed two of the state's largest rooftop solar panel installations, at Ikea stores in Bolingbrook and Schaumburg. The main reason for those projects is that Ikea is committed to having solar panels at its stores. Klein said about 90 percent of its stores have solar panels.
No chief financial officer is going to sign off on a big solar project without financial incentives, Temple said. "It needs to pass the CFO test."
The incentives are especially crucial, given Illinois' lack of sunny days and low electricity prices.
As a result, virtually none of the power flowing to Illinois electricity customers comes from the sun, despite aggressive statewide mandates that require increasing the number of homes and businesses supplied with renewable energy such as solar.
So far, $53 million has been paid into a fund by Illinois electricity customers. But the law allows the money to only be spent at the same time that power is being purchased for Commonwealth Edison and Ameren Illinois customers. But those utilities have more power than they need because most of their customers fled for cheaper alternative suppliers.
So the pot of money just sits.
A legislative fix would allow the agency that procures power to spend that money on behalf of all Illinois electricity users, regardless of whether they remain with their legacy utility. The fix was expected last week but was postponed after the Illinois Competitive Energy Association, a lobby arm of alternative energy suppliers, claimed that such a move would drive up electricity prices.
Sen. Don Harmon, D-Oak Park, who is sponsoring the legislation that would fix the law, said last week that the issue will be taken up after the veto session.
Illinois patterned its renewable energy market after New Jersey, a state that has made up for its dearth of sunshine and low electricity prices by paying well for renewable energy credits.
"On paper we have great incentive for people to invest in solar here," said Sarah Wochos, senior policy advocate and director of research for the Environmental Law & Policy Center in Chicago. "But there's some structural flaws in the mechanics of the law right now that make it impossible for those investments and that growth to happen here."
In the meantime, experts say, solar development in Illinois has been the exception rather than the rule.
"These are customers that really wanted to make it work in Illinois for one reason or another that went beyond the pure economics of the project," said Madeleine Klein, senior vice president of policy and strategy for solar rooftop developer SoCore Energy, a subsidiary of Edison International.
For example, SoCore Energy developed two of the state's largest rooftop solar panel installations, at Ikea stores in Bolingbrook and Schaumburg. The main reason for those projects is that Ikea is committed to having solar panels at its stores. Klein said about 90 percent of its stores have solar panels.
Ikea's projects also illustrate why the state is behind on solar installations.
In Illinois, Ikea's return on its solar investment could take decades, compared with only three years if the same project were hypothetically launched in a sunny state like Hawaii, said Jason Keyes, partner at law firm Keyes, Fox & Wiedman LLP and an attorney for the Interstate Renewable Energy Council.
In Hawaii the cost of a typical residential solar installation has dropped from about $40,000 four years ago to about $26,000 today, according to Brad Albert, owner of Rising Sun Solar, a solar installer in Hawaii. Federal and state tax exemptions further reduce the cost to about $12,100.
As a result, companies have popped up that pay for the solar installation for businesses and homes, and they make a profit selling the cheaper electricity back to the solar panel hosts. So much solar energy is flowing into Hawaii's electrical grid that the incumbent utility has refused to accept any more solar power along certain parts of its system.
"Three years ago, people installing solar were wealthy and had big homes, wanted to save money, but really, the big thing for them was being green. But now it has shifted. People are doing it just for the sake of saving money. And they're saving from day one," Keyes said.
Illinois solar power producers tend to be green enthusiasts, and their projects relatively small.
In Illinois, Ikea's return on its solar investment could take decades, compared with only three years if the same project were hypothetically launched in a sunny state like Hawaii, said Jason Keyes, partner at law firm Keyes, Fox & Wiedman LLP and an attorney for the Interstate Renewable Energy Council.
In Hawaii the cost of a typical residential solar installation has dropped from about $40,000 four years ago to about $26,000 today, according to Brad Albert, owner of Rising Sun Solar, a solar installer in Hawaii. Federal and state tax exemptions further reduce the cost to about $12,100.
As a result, companies have popped up that pay for the solar installation for businesses and homes, and they make a profit selling the cheaper electricity back to the solar panel hosts. So much solar energy is flowing into Hawaii's electrical grid that the incumbent utility has refused to accept any more solar power along certain parts of its system.
"Three years ago, people installing solar were wealthy and had big homes, wanted to save money, but really, the big thing for them was being green. But now it has shifted. People are doing it just for the sake of saving money. And they're saving from day one," Keyes said.
Illinois solar power producers tend to be green enthusiasts, and their projects relatively small.
Source: http://articles.chicagotribune.com/2013-11-10/business/ct-biz-1110-illinois-solar-20131110_1_illinois-competitive-energy-association-low-electricity-prices-alternative-energy-suppliers
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