Updates to the SREC Program – October 2022 | Tick Tock Energy News
New Illinois Solar SREC Incentive Prices for 2022-2023 Recently Published
What the Heck is an SREC? Learn How You Can Take Advantage!
First, let’s cover the basics. An SREC is a solar renewable energy credit, or certificate, that is used to encourage the development of renewable energy resources, namely solar in this case. Illinois has an aggressive goal for building renewable energy capacity in the State and the SREC incentive is a major “carrot” to motivate homes, farms, businesses and any other building type connected to an Illinois utility to install solar. We address details of this on this page but will re-summarize briefly below.
One SREC certificate represents 1,000 kilo Watt-hours (kWh) of electricity production. For example, in Tick Tock Energy’s location of Effingham, Illinois, a typical commercial solar array sized at 100 kW (DC) with a tilt angle of 20 degrees facing south, will generate approximately 135,000 kWh over 1-year. That mean 135 credits were generated that year. These credits then have a marketable value. The State of Illinois then purchases these SRECs on behalf of the major investor-owned utilities such as Ameren and ComEd.
NEW Illinois SREC Prices for 2022-2023 Program Year
The State operates on a fiscal year basis ending on June 30th of each year. This past summer of 2022, the Illinois Shines program was on a temporary pause while a new program administrator was installed. Starting on 9/1/22, new SREC applications are now accepted. New projects will receive funding for their SRECs based on the price schedule below. Each size category is based on the AC-rating of the solar system, or the rating of the inverters (the DC rating is the accumulated size of all the solar panels in Watts, or kiloWatts).
As a reminder, Group A is for Ameren and downstate Illinois utilities. Group B is for ComEd and Northern Illinois utilities. The schedule above is also for participants in the Distributed Generation (DG) program, which is the program homes, farms, commercial facilities would participate in.
Back to our 100 kW (DC) project example mentioned above that generates about 135,000 kWh per year in Central Illinois. A system of that size would typically have an inverter sized around 85 kW (AC). In the table above, this project would qualify for 25 to 100 kW category. Since the project is located in Effingham, IL and served by a utility such as Ameren, Group A would apply. The price per SREC is then $57.94. Since the SREC incentive is based on 15-years of electricity generation, the total incentive is based on the forecasted 15-year of electricity production. For this example, that amount would be around 1,976,000 kWh’s accounting for basic panel output degradation which naturally occurs over time. This is equivalent to 1,976 SRECs and at $57.94 per SREC yields a gross incentive value of over $114,000! This amount is paid out over a 7-year period, or on average $16,356 per year. The actual amounts vary slightly based on some additional considerations but overall this illustrates the payout process.
For a residential example of 10 kW DC and 9 kW (AC), the system would produce about 1/10th of our commercial example used above. A small solar system like this generating 13,500 kWh’s in year 1 would generate 13.5 SRECs and garner a value of $78.51 per SREC for a Group A applicant. For systems under the 25 kW, the payout for 15-years of forecasted production occurs in one-lump sum payment. The gross value before broker fees would be approximately $15,500. This one-time payment would occur around 6 to 9 months after system is energized.
Now You Know Why Solar is HOT in Illinois!
With the new State of Illinois SREC program, going solar makes more sense than ever. In addition to this attractive State incentive, the Federal tax credit is now back up to 30% which really makes solar affordable. Solar is easy to finance and if you have good credit, the electric bill savings coupled with great incentives can result in a solid return on investment.
If you have any questions about the SREC program or solar in general, feel free to call Tick Tock Energy at 217-994-9020 or email us at [email protected]create new email to talk with one of our representatives today!