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The national solar developer Sunrun announced Wednesday it is opening an office in Illinois, citing incentives for distributed solar generation in the state energy law passed in late 2016 and currently being implemented.
San Francisco-based Sunrun opened its first Midwestern location last year in Milwaukee, a move seen by solar advocates as an important vote of confidence in the potential for Midwestern solar development. That move made Sunrun the first major national solar company to launch in the Midwest.
Illinois is Sunrun’s 23rd state; it also operates in Western states from California to Texas and in the Northeast, plus Florida and South Carolina. In about a decade of existence, the company has installed more than 1,200 MW of solar for more than 180,000 customers.
Illinois’s Future Energy Jobs Act calls for increasing the state’s solar capacity from about 75 MW to about 2,700 MW by 2030, with half of that being in distributed and community solar. The law also mandates that significant amounts of distributed solar be installed in environmental justice, low-income and rural communities.
“The Future Energy Jobs Act has everything to do with why Sunrun is able to invest in the state,” said Sunrun director of public policy Amy Heart, who is based in Milwaukee.
The law incentivizes the creation of distributed rooftop solar through the availability of Solar Renewable Energy Credits (SRECs), with 15 years worth of credit being paid up front for smaller installations.
Sunrun also offers a solar-as-service model that eliminates up-front costs, since the company installs, owns and maintains the solar panels and sells the electricity to customers at lower prices than they would pay a utility. Whether customers use this model or pay cash to own their own solar panels, Sunrun will essentially be in charge of acquiring the SRECs and making sure that the panels continue producing energy to fulfill the credits, Heart said.
“It provides additional consumer protection, in a way,” Heart said. “The homeowner is getting the benefit of reduced upfront costs but we have to make sure those systems produce for 15 years.”
Heart was a prominent voice among the coalition of clean energy advocates, solar developers and environmental justice activists who pushed for and helped craft the energy law. She said she is pleased with how the law’s implementation has played out thus far, and expects that large amounts of solar will be installed thanks to the incentives built into it.
Last week the Illinois Commerce Commission made a ruling seen as very positive for the SREC market and solar development, including by prioritizing long-term in-state solar development over the purchase of RECs from other states.
“This is going to be fun over the next couple months figuring out how this all works,” Heart said. “With a program this size there’s going to be some unforeseen speed bumps, but we know the overall design will have an impact on solar of all sizes. SunRun’s certainly excited to be a part of that.”
Heart said that Sunrun will hire about 80 employees initially in its Chicago office, including sales and outreach staff and “boots on the roof” installers. Their work will focus first on northern Illinois, she said, and later they hope to expand throughout the state. She said Sunrun is working with community organizations to help fulfill the law’s mandate of directing jobs to low-income residents and ex-offenders and alumni of the state’s foster care system.
Change on the horizon
On Monday, Sunrun released a report by CEO Lynn Jurich laying out two possible paths forward for the U.S. energy system as a whole: a market-driven one that leads to massive increases in affordable clean energy, and one driven by utilities building “unnecessary infrastructure” and relying too heavily on fossil fuels.
“Utilities cannot be relied upon to drive this consumer-centered clean energy future,” the report says. “Even if they wanted to, utility investors are risk-averse and unlikely to support a program that could cause a short-term loss in revenue and dividends.”
The report recommends ways regulators can clear the path for market forces to stimulate solar development, and also urges incentives for battery purchases and policies to help low-income customers get solar and batteries. It notes that residential solar alone could meet 40 percent of the nation’s electricity demand.
A key turning point will come in Illinois when solar reaches 5 percent of a utility’s load. Under the new law, at that point net metering will end and stakeholders and regulators will re-evaluate how utilities should treat solar in their billing models.
Heart said she and other solar developers were very glad that customers who install solar before the 5 percent cap is reached will be grandfathered in with net metering for the life of their solar array. After the cap is reached, any number of different business models could be used to reward customers for solar energy and bill them for the grid services they still use.
Energy experts are already exploring such models, and SunRun offers batteries that let homeowners store energy from solar panels and sell it back to the grid at peak times when prices are higher.
“Sunrun along with the solar industry is looking forward to start that conversation sooner rather than later,” said Heart. “The sky is the limit when we’re thinking of what is the value-added of distributed generation.”