Illinois Clean Energy and Economic Development Policies

October 10, 2012
by Ann McCabe

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More than 300 Illinois companies work in the wind, solar or geothermal energy industries. They range “from old-line steel fabricators to high-tech start-ups” and employ over 18,000 people.   On the automotive front, the state will invest over $10 million in electric vehicle infrastructure from 2011-2014.

Illinois is home to about 16 wind farms - over 2700 megawatts of wind generation capacity.   In 2011, Illinois was second only to California in new installed wind power and currently ranks fourth in wind-generated electricity.  More than 150 Illinois companies engage in some piece of the wind-energy pipeline.

Chicago has thirteen wind energy headquarters including developers and wind turbine manufacturers.   Chicago draws wind companies because of proximity to wind projects; its air, rail and auto transportation infrastructure; and legal and financial expertise.  The state’s Renewable Portfolio Standard (RPS) increases demand by requiring investor-owned electric utilities to ramp up to 25 percent of electricity from renewable sources by 2025, with 75 percent of that to come from wind. Additionally, six percent of renewable energy must come from solar by the year 2015. In 2008, lawmakers amended the law to cover all competitive electric suppliers in Illinois, essentially doubling the size of the RPS.

The wind-power industry employs about 1,500 directly in Illinois, plus another 3,800 among local suppliers, according to a Navigant Consulting, Inc. study for the American Wind Energy Association. The study predicts a drop to about 800 direct jobs and 1,100 supplier jobs by next year if the federal wind production tax credit expires.

Renewable Energy Resources Program

This state program promotes the development of renewable energy through the Renewable Energy Resources Trust Fund, a public benefits fund administered by the Department of Commerce and Economic Opportunity (DCEO).  The Fund receives about $5-6 million a year for eligible projects and is supported by surcharges including a $0.05 per month per residential electric and gas service, $0.50 per month for small nonresidential electric and gas service, and $37.50 per month for large nonresidential electric and gas service.   These funds support several renewable energy programs including the Solar and Wind Rebate Program, Community Solar and Wind Energy Program, Renewable Energy Business Development Program, and Biogas and Biomass to Energy Grant Program.

Solar and Wind Energy Programs

The DCEO offers rebates for solar and wind energy systems up to 30 percent for residential and commercial systems (equipment and installation) and up to 50 percent for non-profit and government installations, with a maximum individual award of $30,000.  DCEO also offers a grant program that provides similar incentives for larger distributed solar and wind energy projects.  The maximum incentive for this program is $250,000.

Renewable Energy Business Development Program

This program funds projects that support new or expanded renewable energy production through the development of renewable energy businesses and component manufacturers.  Proposed projects currently are eligible for grants up to 50 percent of total project cost, with a maximum grant of $500,000.  

This program has helped attract several solar and wind energy manufacturers to Illinois.  For example, in 2010, DCEO provided Wanxiang America a $700,000 grant for developing a solar panel production facility in Rockford.  The $12.5 million project is expected to create 60 jobs.  In late 2011, Rockford Solar Partners, LLC, a joint venture between Elgin-based Wanxiang America and Chicago-based New Generation Power, received federal environmental approval to proceed on the largest U.S. commercial airport solar farm, starting at 20 MW with plans to scale up to 62 MW. Ameren Illinois executed a 20-year power purchase agreement to acquire the energy and all renewable attributes from the project as part of the state’s long-term renewable energy procurement program. 

In 2008, Siemens Energy & Automation received a $1.25 million grant for a second plant in Elgin for its Mechanical Drives and Winergy businesses, adding an estimated 355 jobs.  The high precision, high torque mechanical gear drives are used by the wind, cement, coal and oil and gas industries.

In recent years, fewer state funds were spent on this program due to the federal ARRA stimulus grant programs.  DCEO received grant applications for the Renewable Energy Business Development Program last fall and expects to approve up to five grants in 2012.

Biogas and Biomass to Energy Grant Program

This state program helps fund projects designed to use biogas or biomass as fuel to produce electricity with combined heat and power (CHP) through gasification, co-firing or anaerobic digestion technologies.  Applicants are eligible for up to $2,500 for feasibility studies and up to 50 percent of total project cost, with a maximum grant for biogas to energy systems of $225,000 and for biomass to energy systems of $500,000.  So far, $800,000 has been awarded for several feasibility studies and six projects including two electric generating systems at wastewater treatment facilities in Fox Lake and Danville, a digester gas system at a dairy cow farm in Pearl City, and co-firing corn bran pellets and wood chips at a CHP system at John Deere Harvester in East Moline.  

Invest Illinois Venture Fund

The Invest Illinois Venture Fund (IIVF supports young, innovative companies and start-ups that show a high potential for future growth resulting in the creation of high-paying professional Illinois jobs.  The fund focuses on cutting-edge technology sectors including clean energy and energy efficiency and  is part of the state’s Advantage Illinois program to reduce the credit crunch for small businesses through a federal small business program.

Electric Vehicles and Infrastructure

 Illinois provides early leadership and support for the adoption and use of electric vehicles (EVs):

  • The Illinois Environmental Protection Agency offers rebates toward EV purchases.
  • DCEO received up to $10 million in capital funding to award EV manufacturing and infrastructure grants and loans.
  • The Illinois Commerce Commission (ICC) launched a Plug‐in Electric Vehicle Initiative to explore regulatory issues related to EV deployment including impact on the electric grid. 
  • In partnership with the City of Chicago and Clean Cities Coalition, Illinois is installing a comprehensive public charging station network.  With about $1 million from a DCEO capital grant and $1 million in federal Clean Cities American Recovery and Reinvestment Act (ARRA) funds, the partners leveraged almost $7 million in private investment to develop the Chicago Area EV Charging Station Project. The project will deploy 73 DC Fast Charge and 207 Level 2 EV charging stations throughout the Chicago area.
  • In addition, EVtown’s creation in Bloomington-Normal  and Kane County’s EV infrastructure ordinance are models for the nation.

A recent report provides a roadmap for EV deployment in Illinois and summarizes the benefits:
"…environmental benefits from reduced emissions, economic development and job creation from the growth of EV‐related technologies and services, decreased reliance on imported petroleum, and opportunities to integrate and leverage renewable energy resources and smart grid deployment."

In the spring of 2011, the General Assembly passed legislation to encourage car‐sharing organizations to purchase EVs in fiscal years 2012 and 2013. Two known car‐sharing organizations, I‐GO and Zipcar, will be eligible for up to 25 percent of project costs involving the purchase of new EVs and new charging infrastructure.  The funds can only be used to purchase new EVs from Illinois car dealerships.

Two Chicago-based entities support renewable and clean energy businesses. The Clean Energy Trust, a non-profit corporation, helps connect entrepreneurs, researchers and early stage companies to accelerate business development, and the Illinois Clean Energy Community Foundation provides clean energy grants.