The future of net metering in Illinois is uncertain as the state considers changes to the program. Net metering allows solar and wind energy producers to sell excess electricity to the grid at retail rates. The current program is set to expire in 2025, and the Illinois Commerce Commission (ICC) is studying potential changes that could reduce the compensation that solar and wind producers receive for their electricity.
One of the main concerns of the ICC is the cost of the program to ratepayers. The ICC is considering a new program that would reduce the compensation that solar and wind producers receive for their electricity. This would save ratepayers money, but it could also make it less attractive for people to install solar and wind energy systems.
The ICC is also considering a new program that would allow solar and wind producers to sell their electricity to the grid at a higher price during peak demand periods. This would provide an incentive for solar and wind producers to install their systems in areas where they can generate the most electricity during peak demand. This would help to reduce the cost of the program for ratepayers and make it more attractive for people to install solar and wind energy systems.
The Evolving Landscape of Illinois Net Metering
Illinois Net Metering: A Brief History
Net metering policies in Illinois have undergone several changes over the past decade. Before 2014, the state had a generous net metering program that allowed solar customers to sell excess electricity back to the grid at retail rates. However, concerns over the growing cost of the program led to a series of revisions, culminating in the Illinois Future Energy Jobs Act (FEJA) of 2016. FEJA reduced the grandfathering period for existing solar customers and introduced a new, lower net metering rate for new customers.
The FEJA net metering rate was designed to provide solar customers with a fair return on their investment while also mitigating the cost to ratepayers. The rate is based on a formula that considers the wholesale cost of electricity, the avoided transmission and distribution costs, and a customer charge. The rate is adjusted annually by the Illinois Commerce Commission (ICC).
In 2021, the ICC approved a new net metering rate that will go into effect in 2023. The new rate is slightly lower than the current rate, but it also includes a new provision that allows solar customers to sell excess electricity back to the grid at a higher rate during peak demand periods.
The Future of Net Metering in Illinois
The future of net metering in Illinois is uncertain. The ICC is currently considering a proposal to further reduce the net metering rate, and there is growing pressure from utilities and other stakeholders to eliminate net metering altogether. However, there is also strong support for net metering from solar advocates and environmental groups, and it is likely that the program will continue in some form.
The best way to stay up-to-date on the latest developments in Illinois net metering is to visit the ICC website or to contact your local utility.
Additional Resources
For more information on net metering in Illinois, please see the following resources:
| Year | Net Metering Rate |
|---|---|
| 2016-2022 | $0.1098/kWh |
| 2023- | $0.1060/kWh |
Understanding the New Tariffs and Rates
Introducing the New Rate Structures
The Revised Amendment to the Illinois Power Agency Act introduced changes to the existing net metering policy. Beginning in 2025, Illinois will implement a two-tiered rate structure for net metering customers. This new structure consists of a “delivery charge” for the utility to maintain and operate the grid, and a “generation charge” based on the amount of electricity consumed from the grid.
Comprehensive Breakdown of the Delivery and Generation Charges
The delivery charge is a fixed monthly fee that all customers will pay regardless of their electricity consumption. This fee covers the costs of delivering electricity to homes and businesses, including the maintenance and upkeep of power lines, transformers, and other infrastructure.
The generation charge is a per-kilowatt-hour (kWh) charge for the electricity that customers consume from the grid. The specific rate will vary depending on the time of day and the season. This charge covers the costs of generating electricity, including the purchase of fuel, operation of power plants, and the distribution of electricity to customers.
Here is a table summarizing the new rate structure:
| Rate Structure | Charge | Description |
|---|---|---|
| Delivery Charge | Fixed monthly fee | Covers the costs of maintaining and operating the electricity grid |
| Generation Charge | Per-kWh charge | Covers the costs of generating and distributing electricity |
Impact on Solar Energy Development
The changes to net metering in Illinois are likely to have a significant impact on solar energy development in the state.
Reduced Financial Incentives
The reduction in the net metering rate will make it less financially attractive for homeowners and businesses to install solar panels.
Increased Competition
The new rules will allow utilities to offer their own solar programs, which could increase competition and lower prices for consumers.
Delayed Adoption
The changes to net metering are likely to delay the adoption of solar energy in Illinois. Homeowners and businesses may be less likely to invest in solar panels if the financial incentives are reduced. The increase in complexity of net metering policies could also make it more difficult for people to understand and navigate, which could further discourage solar adoption.
Economic Impact
The changes to net metering could also have a negative impact on the solar industry in Illinois. Solar companies may have to lay off workers or close their businesses if there is a decline in solar installations. This could have a ripple effect on the state’s economy.
Equity Concerns
The changes to net metering could also have a negative impact on equity in Illinois. Low-income communities and communities of color are less likely to be able to afford solar panels, and they are also more likely to live in areas with high electricity rates.
The table below summarizes the potential impacts of the changes to net metering in Illinois on solar energy development:
| Impact | Description |
|---|---|
| Reduced financial incentives | The reduction in the net metering rate will make it less financially attractive for homeowners and businesses to install solar panels. |
| Increased competition | The new rules will allow utilities to offer their own solar programs, which could increase competition and lower prices for consumers. |
| Delayed adoption | The changes to net metering are likely to delay the adoption of solar energy in Illinois. |
| Economic impact | The changes to net metering could also have a negative impact on the solar industry in Illinois. |
| Equity concerns | The changes to net metering could also have a negative impact on equity in Illinois. |
Implications for Residential and Commercial Solar Owners
What is Net Metering?
Net metering is a billing mechanism that allows solar owners to sell excess electricity generated by their systems back to the grid at retail rates. Illinois’ current net metering policy allows solar owners to receive full retail value for their excess electricity until December 31, 2024.
Changes to Net Metering in 2025
Effective January 1, 2025, Illinois will transition to a new net metering policy that significantly reduces the compensation rate for excess electricity. Under the new policy, solar owners will be compensated for their excess electricity on a tiered basis, with lower rates applying to larger systems.
Impact on Solar Economics
The changes to net metering will have a significant impact on the economics of solar ownership in Illinois. The reduced compensation rate for excess electricity will make it more difficult for solar owners to recover their investment costs and may deter some from adopting solar energy.
Options for Solar Owners
Solar owners who are concerned about the impact of the new net metering policy have several options:
- Install smaller solar systems that will generate less excess electricity.
- Use their excess electricity on-site through energy storage devices, such as batteries.
- Explore community solar options, which allow multiple customers to share the benefits of a single solar system.
Alternatives to Net Metering
In addition to the options listed above, solar owners may also consider alternative billing mechanisms, such as:
- Time-of-use rates, which charge different rates for electricity used during different times of day
- Demand charges, which charge a fee based on the maximum amount of electricity used at any one time
Impact on Commercial Solar
The changes to net metering will have a particularly significant impact on commercial solar projects. Many commercial businesses use large amounts of electricity during peak hours, when the sun is not shining. Under the new net metering policy, these businesses will receive lower compensation for their excess electricity, which will make it more difficult to justify the investment cost of solar energy.
TABLE OF COMPENSATION RATES
| System Size | Compensation Rate |
|---|---|
| Less than 10 kW | Full Retail Rate |
| 10 kW to 50 kW | 75% of Retail Rate |
| 50 kW to 250 kW | 50% of Retail Rate |
| Over 250 kW | 25% of Retail Rate |
Transition to Time-of-Use Rates
Understanding Peak and Off-Peak Hours
Time-of-use (TOU) rates charge different prices for electricity based on when you use it. Illinois is expected to transition to TOU rates in 2025. These rates typically have three periods: peak, off-peak, and shoulder. Peak hours are the times when electricity demand is highest, such as during hot summer afternoons or cold winter evenings. Off-peak hours are typically overnight when demand is lowest.
Benefits of TOU Rates
TOU rates promote energy conservation by encouraging consumers to shift their electricity use to off-peak hours. This helps reduce strain on the grid during peak times and can lead to lower overall electricity costs. Additionally, TOU rates can reward homeowners with solar panels by providing higher compensation for electricity generated during peak hours.
Impact on Net Metering
TOU rates will have a significant impact on net metering in Illinois. Currently, net metering allows solar homeowners to sell excess electricity back to the grid at a retail rate. However, under TOU rates, the value of this excess electricity will vary depending on the time of day it is generated.
Managing TOU Rates with Solar
Solar homeowners can manage TOU rates by adjusting their electricity usage patterns. One strategy is to charge electric vehicles and run appliances during off-peak hours. Additionally, solar batteries can store excess electricity generated during peak hours and discharge it during evening peak times.
| TOU Rate Periods | Typical Hours |
|---|---|
| Peak | Summer: 2 PM – 7 PM Winter: 5 PM – 8 PM |
| Off-Peak | 11 PM – 6 AM |
| Shoulder | All other hours |
Smart Grid and Net Metering Integration
The integration of smart grid technology and net metering programs is essential to optimize the benefits of both systems. Smart grids, which are characterized by real-time monitoring, dynamic pricing, and advanced communication capabilities, can facilitate the seamless integration of distributed generation resources such as solar panels.
Dynamic Pricing and Load Shifting
Smart grids enable dynamic pricing, which adjusts electricity prices based on supply and demand. This allows consumers to shift their energy usage to off-peak hours when prices are lower. Net metering customers can take advantage of this by exporting excess solar power to the grid during peak hours and importing it back during off-peak hours at a lower cost.
Data Analysis and Forecasting
Smart grids collect vast amounts of data on energy usage and generation. This data can be analyzed to identify trends and patterns, which can help utilities optimize their operations and improve the efficiency of net metering programs. By forecasting solar power generation, utilities can better manage grid balancing and minimize the risk of overloading the system.
Community Energy Management
Smart grids facilitate the formation of microgrids and other community-based energy management systems. These systems enable neighbors to share excess solar power and reduce their collective energy costs. Net metering programs can be integrated with these systems to incentivize the participation of distributed generation resources.
Grid Stability and Reliability
The integration of net metering and smart grids can enhance the stability and reliability of the electric grid. By providing a distributed source of energy, net metering reduces the dependence on centralized power plants. Smart grids, with their advanced monitoring and control capabilities, can optimize the dispatch of distributed generation resources to ensure grid reliability and minimize outages.
Energy Efficiency and Conservation
Smart grids and net metering programs can promote energy efficiency and conservation. By providing consumers with real-time information on their energy usage, smart grids empower them to make informed decisions about their consumption habits. Net metering incentivizes the adoption of renewable energy sources, which reduces greenhouse gas emissions and contributes to a cleaner environment.
| Smart Grid Feature | Benefit for Net Metering Integration |
|---|---|
| Real-time Monitoring | Optimizes dispatch of distributed generation resources |
| Dynamic Pricing | Encourages load shifting and cost savings |
| Data Analysis | Forecasts solar power generation and improves grid balancing |
| Community Energy Management | Facilitates sharing of excess power and reduces energy costs |
| Grid Stability | Reduces reliance on centralized power plants and enhances reliability |
| Energy Efficiency | Provides consumers with information and incentives for energy conservation |
The Future of Distributed Generation in Illinois
The progressive changes to Illinois’ net metering policy in 2025 have far-reaching implications for the state’s energy landscape. These changes will significantly impact the adoption and operation of distributed generation (DG) systems, such as rooftop solar and small-scale wind turbines.
Impact on Residential and Commercial Customers
The new policy will reduce the value of net metering credits for residential and commercial customers. This reduction will make it less financially attractive for these customers to install DG systems, potentially slowing the growth of DG in Illinois.
Impact on Community Solar Projects
The policy changes will also impact community solar projects, which allow multiple subscribers to share the benefits of a larger DG system. These projects will face reduced incentives and increased costs, which could hinder their development.
Impact on DG Development
The decreased financial attractiveness of DG systems could lead to a slowdown in DG development in Illinois. This could have a negative impact on the state’s renewable energy goals and its commitment to reducing carbon emissions.
Impact on Grid Stability
DG systems can play a role in grid stability by providing additional generation capacity and reducing peak demand. However, the reduced incentives for DG systems could make it more difficult for utilities to maintain grid stability.
Impact on Local Economies
The DG industry creates jobs and stimulates local economies. The policy changes could reduce the economic benefits of DG in Illinois, particularly in communities that rely on DG development for job creation.
Impact on Consumer Choice
The policy changes will limit consumer choice in energy generation. Residential and commercial customers will have fewer incentives to adopt DG systems, reducing their ability to control their energy costs and make environmentally friendly choices.
Policy Recommendations
To mitigate the negative impacts of the 2025 policy changes, stakeholders have proposed several recommendations:
| Recommendation |
|---|
| Increase financial incentives for DG systems |
| Reduce costs for DG development |
| Support community solar projects |
| Develop grid integration strategies |
| Provide consumer education and outreach |
Navigating the Changes for Solar Industry Professionals
Understanding the Transition Timeline
The new net metering policy will take effect on June 1, 2025, with a gradual transition period. Here’s a timeline of key milestones:
- June 1, 2023: Net metering rates for new residential and small commercial customers will be capped at 80% of the retail electric rate.
- June 1, 2024: Net metering rates for existing residential and small commercial customers will be capped at 75% of the retail electric rate.
- June 1, 2025: Net metering rates for all residential and small commercial customers will be capped at 70% of the retail electric rate.
Impact on Solar System Design
The reduced net metering rates may impact the economics of solar installations. Solar industry professionals should consider the following factors when designing systems:
- Increased Self-Consumption: Encourage customers to maximize their on-site energy consumption to reduce the need for excess energy to be sold back to the grid at a lower rate.
- Battery Storage Integration: Consider incorporating battery storage systems to store excess solar energy and discharge it during peak demand hours when energy prices are higher.
- Load Shifting: Educate customers on load shifting strategies to reduce energy consumption during peak periods and increase consumption during off-peak periods.
Financing and Business Models
The new net metering policy may also affect financing and business models for solar companies. Consider exploring the following strategies:
- Power Purchase Agreements (PPAs): PPAs can provide customers with a fixed monthly payment for solar energy, eliminating the need for upfront capital costs.
- Community Solar: Encourage customers to participate in community solar projects, allowing them to access solar energy without installing a system on their property.
- Subscription-Based Services: Offer subscription-based services that provide access to solar energy at a flat monthly rate, covering system installation and maintenance costs.
Legislative Updates
In 2017, Illinois passed the Future Energy Jobs Act (FEJA), which included significant changes to the state’s net metering program. These changes included a reduction in the maximum size of net-metered systems from 10 MW to 5 MW and a new requirement that net-metered customers pay a monthly fixed charge to their utility.
In 2021, the Illinois Legislature passed House Bill 3626, which made further changes to the state’s net metering program. These changes included a provision that would have allowed utilities to charge net-metered customers a “grid access charge.” However, this provision was vetoed by Governor J.B. Pritzker.
Policy Implications
The changes to Illinois’ net metering program have had a significant impact on the development of solar energy in the state. The reduction in the maximum size of net-metered systems has made it more difficult for commercial and industrial customers to install solar arrays.
The requirement that net-metered customers pay a monthly fixed charge has also increased the cost of solar energy for residential customers. As a result of these changes, the number of new solar installations in Illinois has declined in recent years.
Net Metering Changes in Illinois 2025
The following are the key changes to Illinois’ net metering program that will take effect in 2025:
| Change | Effective Date |
|---|---|
| Maximum system size reduced from 5 MW to 1 MW | January 1, 2025 |
| Net-metered customers will be required to pay a grid access charge | January 1, 2025 |
| The grid access charge will be set by the Illinois Commerce Commission (ICC) | January 1, 2025 |
Best Practices for Adapting to the New System
1. Monitor Your Energy Usage
Start by tracking your electricity consumption to identify peak usage times and areas where you can reduce demand.
2. Optimize Energy Efficiency
Install energy-efficient appliances, upgrade insulation, and use smart thermostats to minimize your energy needs.
3. Consider Time-of-Use Rates
Explore if your utility offers time-of-use rates, which charge higher rates during peak hours and lower rates during off-peak hours.
4. Storage Options
Invest in energy storage systems like batteries to capture excess solar energy during the day and use it at night or during peak hours.
5. Participate in Demand Response Programs
Enroll in demand response programs that reward you for reducing your energy usage during peak periods.
6. Use Smart Technology
Employ smart energy monitors and control devices to automate energy management and optimize your system’s performance.
7. Explore Solar Power
Consider installing a solar photovoltaic system to generate clean, affordable energy and offset your electricity usage.
8. Seek Professional Advice
Consult with a qualified electrician or energy auditor to assess your specific needs and develop a tailored plan.
9. Educate Yourself
Stay informed about the latest net metering policies and industry best practices to make informed decisions.
10. Consider a Community Solar Project
Participate in a community solar project to share the benefits of solar without installing your own system. This option allows you to subscribe to a portion of a larger solar array and receive credits on your utility bill based on your share of energy production.
Illinois Net Metering Changes 2025
In September 2022, the Illinois Commerce Commission (ICC) approved changes to the state’s net metering program. These changes will take effect on January 1, 2025, and will impact all solar customers who participate in the program. The major changes include:
- A reduction in the net metering cap from 5 MW to 1 MW for new solar installations.
- A new time-of-use (TOU) rate structure for solar customers.
- A monthly fixed charge for solar customers.
The ICC’s decision to reduce the net metering cap was controversial, and it has been met with opposition from some solar advocates. They argue that the cap will make it more difficult for solar customers to save money on their electric bills, and that it will discourage the development of new solar projects in the state. The ICC, however, maintains that the cap is necessary to protect the interests of all electric customers, including those who do not have solar panels.
The new TOU rate structure will also impact solar customers. Under the TOU rate structure, electricity prices will vary depending on the time of day. This means that solar customers will earn less money for the electricity they generate during peak hours, when electricity prices are highest. The ICC has said that the TOU rate structure is designed to encourage solar customers to use more of the electricity they generate during off-peak hours, when electricity prices are lower.
The monthly fixed charge for solar customers is a new addition to the net metering program. This charge will be applied to all solar customers, regardless of the size of their solar system. The ICC has said that the fixed charge is necessary to cover the costs of maintaining the electric grid.
The changes to the Illinois net metering program are significant, and they will have a major impact on solar customers in the state. It is important for solar customers to understand these changes and how they will affect their electric bills.
People Also Ask About Illinois Net Metering Changes 2025
When do the new net metering changes take effect?
The new net metering changes take effect on January 1, 2025.
What is the new net metering cap?
The new net metering cap is 1 MW for new solar installations.
What is the new time-of-use (TOU) rate structure?
The new TOU rate structure is a time-varying electricity pricing system that charges different rates for electricity use during different times of day.
What is the new monthly fixed charge for solar customers?
The new monthly fixed charge for solar customers is $10.
