Solar and Shines Basics
How Does Solar Work?
Solar power is created when photovoltaic (PV) solar panels generate electricity from sunlight. Panels are installed and positioned to capture sunlight, which is absorbed by PV cells and generates electrical charges to create electricity. A group of solar panels, or array, can be connected to help meet the electric needs of individual buildings, or communities of subscribers for larger solar arrays.
Electricity generated from solar panels can be used immediately (and even stored onsite via battery storage) as with Distributed Generation or generated remotely and transmitted to the electrical grid as with Community Solar projects.
In either model, the electricity produced helps reduce reliance on fossil fuel power plants. Solar power is a source of clean, abundant, and renewable energy.
How Do Illinois Shines Incentives Work?
Illinois Shines provides incentives for solar projects through the purchase of Renewable Energy Credits, or RECs, from Distributed Generation and Community Solar projects. RECs are widely used in energy markets and represent the environmental value of energy generated by renewable sources, including solar. With RECs, the amount of renewable energy sent to the utility grid is tracked, and a REC is issued when one megawatt-hour of electricity from a renewable energy source is produced. Illinois Shines has set incentive amounts that are paid for RECs produced by solar projects participating in the Program. The incentives are paid to participating Approved Vendors and savings are passed on to customers.
Approved Vendors are entities approved by the Program Administrator (as an agent of the Illinois Power Agency), to submit project applications to the Illinois Shines Program and act as a counterparty to the Illinois Shines contracts with utilities. Designees are third parties (i.e., non-Approved Vendor) entities that have direct interaction with end-use customers; they include installers, marketing firms, lead generators, and sales organizations. Approved Vendors often work with Designees to manage various portions of solar system development.
How does a customer participating in Illinois Shines see savings from REC incentives?
Each Program Year, the IPA sets the price for RECs for various types of projects that apply to Illinois Shines in that Program Year.
Solar providers calculate the estimated RECs that an individual project will produce over a period of time.
With Illinois Shines, Distributed Generation customers agree to transfer ownership of RECs to their solar vendor, who then receives payment for them from utilities. Solar vendors pass the value of these payments to the customer in the form of reduced purchase prices, installation costs, lease payments, or other methods agreed upon in a contract. Solar vendors will disclose the REC values for a project to the customer, through the required use of Disclosure Forms, allowing customers to compare multiple offers from multiple vendors. Projects and contracts may be structured in different ways by different vendors, allowing consumers to consider the offer that best meets their needs.
With Illinois Shines, customers who don’t wish to or can’t install solar directly on their property can subscribe to a large solar project called a Community Solar project. Approved Vendors that develop these large projects get paid for the large amount of RECs the projects produce, then pass on that value to the customers who subscribe to these projects.
Watch this video to learn more about what a REC is.
Illinois residents interested in solar power don’t have to participate in Illinois Shines and can work directly with installers to develop projects outside of the program. But Illinois Shines offers several key benefits for both customers and participating Approved Vendors. The Illinois Shines program:
Illinois Shines Project Types
Illinois Shines supports solar energy across two main project types:
- Distributed Generation: Solar panels installed directly on the roof or land of a home, school, house of worship, business or other customer site.
- Community Solar: A large, centralized solar project providing solar bill credits to subscribers who don’t have access to their own solar panels. This is a great option for renters or homeowners for whom installing solar panels isn’t practical or cost-effective.