If state’s community solar market were a board game, it would be Hungry Hungry Hippos—with developers gobbling up SRECs as fast as they’re put in play.
The Illinois Power Agency ran a much-anticipated solar lottery this week and awarded renewable energy credits to community solar projects across the state, a major step in constructing a fledgling state market.
Hundreds of new solar facilities will soon be built across Illinois, and potentially thousands of customers will have a new avenue to participate in solar generation without installing panels on their homes.
That’s the good news.
The bad news? For every project that is built, there are many more stalled on a waitlist.
“The lottery dramatized what we’ve been saying for the last few months: What we have funding for just doesn’t meet the demand,” said Sean Gallagher, vice president of state affairs for the Solar Energy Industries Association.
If Illinois’ community solar market were a board game, it would be Hungry Hungry Hippos, with developers frantically gobbling up solar renewable energy credits as fast as Illinois puts them in play.
Through its significantly oversubscribed program, the state gave the go-ahead to a total of 112 community solar projects with about 215 megawatts of capacity.
Five companies took home more than 40 percent of that pie, with Cypress Creek Renewables winning the largest slice at 33 megawatts across 17 projects, followed by TCA Microgrid Energy Management (22 megawatts), and Borrego Solar Systems (14 megawatts).
“State of purgatory”
The Illinois Power Agency (IPA) opened its Adjustable Block Program in February to greater-than-expected demand, drawing nearly 2 gigawatts’ worth of applications.
Alex Farkes, director of project development in the Midwest for developer Borrego Solar, said he feels good about building projects in Illinois but is concerned that the rest of the company’s pipeline will remain in a “state of purgatory.”
Borrego Solar’s 14 megawatts’ worth of winning contracts came out of 80 megawatts’ worth of applications it put forward.
If the state program doesn’t grow, Borrego’s remaining projects may never be built. Developers are pushing legislators for more community solar and supporting the Path to 100 Act, legislation to expand the Illinois renewable portfolio standard to 40 percent by 2030.
“There are a lot projects that people spent time and effort developing, and communities spent time and effort processing,” Gallagher said. “We can’t support those projects under the existing structure, and that’s a big part of the reason for the legislation.”
In early April, to the dismay of developers, the IPA allocated the majority of what’s left of the Adjustable Block Program capacity to large rooftop solar projects, with only a small amount for community solar.
Summit Ridge Energy will build five projects at 9 megawatts of capacity, breaking ground as soon as this summer. But CEO Steve Raeder said the company was disappointed that the IPA didn’t allocate more discretionary capacity to community solar.
“We hope the participation witnessed in the Adjustable Block Program expedites the passage and launch of a subsequent program, so more customers and landowners get a chance to participate in a growing community solar market that offers a win for both parties and the environment,” Raeder said.
Concerns about how lottery was run
Developer Soltage will build a 2-megawatt project, despite lining up 19 project applications with 38 megawatts of capacity. Jonathan Roberts, the company’s vice president of development in the Midwest, said he was “disappointed and dismayed” by the results.
Roberts wants to ensure that lottery was truly random. “The lottery was supposed to be random and we’re a little skeptical based on the data that it was truly a random process. It raises questions which the industry is working to understand and address.”
The IPA published details about the lottery’s algorithm online.
Roberts still sees a strong future in Illinois. “Illinois is still very much a market to keep an eye on,” he said.
“We’re going to see more than 200 megawatts of community solar deployed across the state. This Adjustable Block Program, despite some of the speed bumps, is very exciting.”
Beyond community solar, the IPA awarded an additional 125 megawatts in solar contracts with a large distributed generation program.