Renewable energy accounted for 11% of all energy generated in Illinois last year. That may sound low at first glance, but that percentage ranks Illinois second in the Midwest for installed renewable energy power and fifth in the nation for installed wind power with almost 4,000 MW of wind and 60 MW of solar. Nonetheless, the State of Illinois needs to increase the pace of renewable development and generation if it wants to maintain its reputation as a renewable energy leader in the U.S. The State took steps last week to do just that. On Wednesday, September 15, Illinois Governor J.B. Pritzker signed SB 2408, known as the Climate and Equitable Jobs Act (“Act”), establishing one of the most comprehensive state-level renewable energy initiatives to date. The Act's highlights include $580 million a year for wind and solar development to increase Illinois' renewable energy standard to 40% by 2030 and 50% by 2045.
The Act mandates fossil fuel plants to reduce emissions by 45% by 2035 and requires fossil fuel plants to be carbon-free by 2045, with adjustable timelines depending on the source, carbon emission levels, and impact on grid reliability. In addition, the Act offers up to $47 million annually to convert coal-fired plants to solar or energy storage facilities. The Act also establishes a priority for electric vehicle (EV) charging infrastructure, aiming to put 1 million EVs on the road by 2030 and offers up to 80% of the cost of constructing charging stations. To meet the 40% renewable energy target by 2030, the Solar Energy Industries Association estimates Illinois will need to double its wind capacity, add over 4,000 MW of new utility-scale solar, and install over 5,000 MW of rooftop and community solar. As part of this effort, the Illinois Power Agency plans to obtain approximately 2.5 million Renewable Energy Credits (RECs) by June 2022 and 3.8 million RECs from 2022-2030.
Overall, this Act is more encouraging news for renewable energy developers, tax equity investors, construction lenders, and contractors currently involved – or looking to get involved – in the expanding Illinois renewables market. However, one possible side effect of the increased attention and push for renewables development may be additional scrutiny and involvement of Illinois state agencies and counties regarding siting, permitting, and regulatory approvals. This increased involvement may lead to additional costs and delays, though that is a small price to pay for inclusion in the State's rapidly growing renewables market. Moving forward, developers and investors can expect other states to follow Illinois's lead and propose and pass legislation in response to calls for more aggressive action to decarbonize the country's energy supply sector.
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