Green home solar energy

How Solar Net Metering Works in Illinois 2023?

Each year, an increasing number of homes across Illinois choose to join the green energy revolution by installing solar panels. If you’re thinking about getting solar panels and you’re looking into available incentives, you’ve no doubt come across Illinois net metering – and you may be wondering How Solar Net Metering Works in Illinois 2023?

In this blog article, we’ll discuss Illinois net metering and how it can save you money, take a look at the future outlook of net metering and touch upon other cost-saving solar options available in Illinois.

How Solar Net Metering Works in Illinois 2023?

1. What Is Illinois Net Metering?

During peak daylight hours, most solar panel systems produce more electricity than is needed by the home or small business they belong to during the time window of its production.

Solar net metering is a way that ensures that this electricity can be put to good use elsewhere, by feeding it into the grid, and ensures that homes and small businesses across Illinois can enjoy maximum savings from their solar panel systems.

2. How Solar Net Metering Works In Illinois 2023?

The Illinois net metering program commenced on April 1, 2008, ensuring that Commonwealth Edison, Ameren Illinois Utilities and MidAmerican Energy Company are legally required to reimburse their customers for any solar-generated electricity they feed into the grid.

Homes and small businesses with solar panel systems are reimbursed by their utility company in the form of utility credits, which can be offset against the cost of any grid-sourced electricity they use.

  • Under the rules set out by the Illinois legislature, eligible renewable energy systems of 40kW or less receive a one-to-one retail rate credit.
  • Customers will be compensated by the excess electricity generated by their solar panel systems at the same rate that they pay when buying electricity from their utility company.
  • Credits are carried over month-to-month, with the annual period either running from May to April, or from November to October, at the customer’s discretion.
  • Those who are “time of use” customers will be compensated at time-of-use rates.

3. What Is The Outlook Of Solar Net Metering?

Many customers who are thinking of getting solar panels in Illinois will no doubt be wondering if, like most solar incentives, solar net metering will have a limited lifespan. How Solar Net Metering Works In Illinois 2023?

What Is The Outlook Of Solar Net Metering?

The 2017 Future Energy Jobs Act

In 2017, the Illinois state legislature voted through the Future Energy Jobs Act, which requires Illinois’ largest electric utility companies to launch one of the nation’s most ambitious plans for customer electricity savings.

  • By 2030, Commonwealth Edison must expand and enhance customer efficiency programs to cut electricity waste by 21.5%
  • Ameren must expand and enhance customer efficiency programs to cut electricity waste by 16% in the same period
  • The act lays out a funding structure to ensure that by 2025, 25% of ComEd and Ameren’s electricity will come from renewable sources, such as wind and solar

This was a landmark piece of legislation, as for years Illinois utilities had resisted the solar energy movement. Having a strong renewable energy sector benefits everyone, as it lowers the cost of electricity and increases reliability.

However, in exchange for these concessions by the utilities, a clause was included that dictates a phase out of the one-to-one ratio of net metering at some point in the future.

The act allows utilities to petition the Illinois Commerce Commission for a reduction in net metering once distributed solar penetration reaches 5% of the total peak demand during the previous year. How Solar Net Metering Works In Illinois 2023?

Ameren Already Lobbying For A Reduction

In 2020, Ameren already decided to impose a reduction in net metering, claiming that penetration had surpassed the 5% threshold.

Initially, the Illinois Commerce Commission denied an emergency motion by solar advocates seeking to halt Ameren’s changes. 

However, it later asked Ameren to delay net metering changes. Ameren then claimed that it could not comply with the Commission’s request, as this would allegedly mean violating the law.

Disputes between Ameren and solar advocates over the true figure sparked an investigation and a legal debate over how the distributed solar penetration was calculated.

Ameren essentially lost after the Commission decided that its calculations were selective, so that the numbers would be in its favor, and the true distributed solar penetration was far below the 5% threshold.

Their finding meant that new homes installing solar panels could still benefit from net metering on its current terms, and as of this moment they continue to do so. How Solar Net Metering Works in Illinois 2023?

What This Means For The Future Of Net Metering

Essentially, the days of net metering on a one-to-one ratio for new customers installing solar panels are numbered. At some point in the future, the value of the credits offered in the agreement will be reduced.

However, homes that install solar panels during the period where net metering is at a one-to-one reimbursement ratio will keep their original terms – the revision will likely only apply to new applicants, as has been the case in other states where this has happened.

This shows that if you want to make maximum savings from your solar panel system, it’s better to install your solar panels sooner rather than later. How Solar Net Metering Works In Illinois 2023?

What This Means For The Future Of Net Metering

4. What Other Incentives Are Available In Illinois?

There are two other main solar incentives available to Illinois residents. They are:

  1. The Federal Solar Investment Tax Credit

This is a tax credit worth 30% of the value of your system. To be eligible, you have to be paying a certain amount in federal taxes. You should always check with your accountant to find out if you’re eligible before buying solar panels.

  1. The Illinois Shines’ Solar Renewable Energy Certificates (SRECs)

This program allows customers in Illinois to essentially reduce the cost of their solar panel system by roughly 25% by generating Solar Renewable Energy Certificates. 

The exact amount of money you receive is calculated based on the size of the solar panel system that you purchase, and it can take up to 18 months after applying to receive the money.

Some companies, however, will apply on your behalf and automatically deduct the amount from the cost of your system. How Solar Net Metering Works In Illinois 2023?

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5. Can You Get Free Solar Panels In Illinois?

Not all homeowners can afford the upfront costs of a solar panel system, even with incentives. However, it is now possible to get solar panels without spending a penny of your own money. The options are:

  1. Solar Panel Leasing

A solar panel lease is where a private company pays for the solar panel system to be installed on your roof and you lease the solar panels from them.

With a solar panel lease, you’re still eligible for Illinois net metering as you own all of the electricity produced by the solar panels that you’re leasing.

Most homeowners who lease their solar panels still save around 40% on their utility bill, and savings occur from day one.

  1. Solar Power Purchase Agreement

With a Solar Power Purchase Agreement (PPA), like with a solar panel lease, you also don’t pay anything for the solar panel system that is installed on your home.

However, you’re not leasing the solar panels. Instead, you’re paying a fixed rate for the electricity you use. Most homeowners with a PPA save around 10-20% on their utility bill.

Are You Planning A Green Home Makeover?

If, like thousands of homes across Illinois, you’ve decided that solar is the way to go, you’ll no doubt have realized that getting solar panels isn’t as straightforward as most people might think.

That’s why Green Home Makeover is here to help. We’re solar experts with more than 7 years of industry experience, helping countless homes transition to solar energy.

We’ll assess your home and your energy needs, design your system and manage every aspect of your solar project, so all you have to worry about is being home on the day of the installation.

If you’d like to know more about how we can help make your solar dream a reality, contact us today for a free, no-obligation consultation and quote.
Check more in our coming article about: New net metering policy, Illinois net metering law, what is net metering, Illinois net metering changes & How to read comed bill with solar panels?


References:

  1. https://illinoisattorneygeneral.gov/environment/netmetering.html
  2. https://energynews.us/2020/10/14/southern-illinois-solar-energy-growth-prompts-fight-over-net-metering-math/ 
  3. https://www.citizensutilityboard.org/future-energy-jobs-act/#:~:text=What%20the%20act%20does%3A,and%20Ameren%20by%2016%20percent
  4. https://www.forbes.com/home-improvement/outdoor/solar-leasing-explained/