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U.S. Department of Energy Energy Efficiency and Renewable Energy

Energy Incentive Programs, Illinois

Updated November 2011

Illinois' utilities budgeted over $130 million in 2010 across their various programs (including those directed at residential and low-income customers) to promote energy efficiency in the state.

What public-purpose-funded energy efficiency programs are available in my state?

Illinois' 1997 restructuring law provides a small amount of funding for energy efficiency programs (approximately $3 million annually, statewide) through non-bypassable flat monthly charges on customer bills. This Energy Efficiency Trust Fund, administered by the Illinois Department of Commerce and Economic Opportunity (DCEO), is authorized through 2015.

In response to the 2007 legislation creating the state's Energy Efficiency Portfolio Standard, the DCEO launched several new energy efficiency programs aimed at public sector consumers. These Public Sector Electric Efficiency programs, which started in 2008, provide financial incentives specifically for qualified public sector projects in the ComEd or Ameren Illinois service areas. Public Sector natural gas efficiency incentives, including conventional equipment rebates and a boiler tune-up program, are available for customers of Ameren Illinois, Nicor Gas, Peoples Gas and North Shore Gas.

  • The Standard Incentive program provides grants (maximum $300,000) and rebates (maximum $50,000) for a variety of standard electric efficiency measures, including lighting, motors (replacing motors that would otherwise have been rewound instead of replaced), VFDs, and HVAC equipment. Grants cover up to 75% of total project cost, and 100% of the incremental cost of efficiency measures.

  • The Custom Incentive program provides incentives of $0.12/kWh for electric efficiency, and $1.25/therm for gas efficiency, projects for first-year savings toward qualifying energy saving measures with a simple payback of 1-7 years. Pilot projects that include what are considered "breakthrough" technologies (such as some exterior lighting and geothermal heat pumps)_may be funded at $0.30/kWh.

  • The New Construction program offers grants for new buildings that achieve thresholds of energy efficiency beyond code. Incentives are in dollars per square foot and rise with increasing percentage savings beyond code.

  • The Retro-commissioning program offers funding for identifying and implementing low-cost adjustments to systems in existing buildings (e.g., HVAC) that improve energy efficiency and use.

In addition, the DCEO helps to sponsor the Smart Energy Design Assistance Center, which offers free technical assistance to those planning energy efficiency improvements to existing buildings or incorporating energy-saving measures in new buildings. Assistance is available from the initial energy audit (existing buildings) or design phase (new construction) all the way through implementation.

For larger customers (annual energy cost exceeding $500,000), the DCEO offers the Large-customer Energy Analysis Program (LEAP), which provides technical assistance in developing and evaluating energy efficiency potential. This program consists of a sustainable energy workshop, personalized technical assistance with developing an energy plan, and a follow-up "lessons learned" workshop. As part of the program, DCEO also helps to identify utility and DCEO incentive programs that can provide funding for implementing efficiency measures in the energy plan. Customers typically experience a 10 to 30% reduction in energy consumption.

As part of a 1999 restructuring settlement approved by the state legislature, Commonwealth Edison (ComEd) agreed to allocate $225 million (on a one-time basis) to a Clean Energy Trust Fund in order to support environmental initiatives, energy-efficiency programs, and renewable energy projects. The trust fund is administered by the Illinois Clean Energy Community Foundation. Energy efficiency grants are available through the foundation, although these funds are primarily targeted toward local, hard-to-reach market segments. The grant programs involve an annual or semi-annual submission process.

What utility energy efficiency programs are available to me?

The ComEd Smart Ideas initiative offers a variety of energy efficiency programs:

  • Prescriptive incentives are available to business customers for efficient lighting, refrigeration, HVAC units, compressed air, food service equipment and variable speed drives. Funds are available on a first-come, first-served basis.

  • Custom incentives are also available for improvements in system efficiency resulting in permanently reduced consumption. Projects with a five-year or shorter life or an energy management control system installation may be eligible for an incentive of $0.03/kWh saved. Projects with a life longer than five years can be eligible for an incentive of $0.08/kWh. Simple payback period must be longer than one year and less than seven. Incentives are capped at $400,000 per year per facility for both custom and prescriptive incentives. Because pre-approval is necessary to receive incentives, contact ComEd before you begin work.

  • The New Construction program offers three tracks of incentives. The Systems track is for projects in medium buildings (over 20,000 square feet) that are almost completed; these projects can qualify for up to $200,000 in low-wattage lighting and efficient HVAC systems. The Comprehensive track offers project assistance and up to $200,000 in incentives, plus an additional $20,000 in design performance incentives to support more integrated energy-saving designs in buildings over 50,000 square feet. The Small Building track offers up to $15,000 per project for integrated lighting and daylighting for new construction or renovations to small buildings (under 20,000 square feet). Preapproval is required for all tracks.

  • ComEd also offers Building Retro-commissioning, which includes no-cost energy audits and the installation of low- or no-cost efficiency measures. Both electric and gas measures are included. A related program for facilities with compressed air systems provides a comprehensive study of these systems to identify energy-saving opportunities.

Ameren Energy offers its business customers a variety of incentives through the Act On Energy program. Standard incentives include rebates for efficient lighting, HVAC, VFD, steam boilers and refrigeration. More complex projects aimed at improving efficiency of compressed air systems and other processes can qualify for custom incentives. Custom incentives are based on $0.05/kWh (for lighting) or $0.07/kWh (for other applications) per first-year kWh savings and are limited to 50% of incremental project cost. There is a maximum of $600,000 in incentives for electric projects for all incentive programs combined and projects must have a 1 to 7 year payback. Gas efficiency projects are eligible for $0.80/therm saved per first-year savings, and are limited to $200,000 in total incentives, Custom incentives must have pre-approval to qualify for funds. Ameren also offers a retro-commissioning program through Act on Energy.

MidAmerican Energy also offers prescriptive rebates on lighting, heating and cooling, motors and VSDs, and commercial kitchen equipment.

What load management/demand response options are available to me?

The PJM Interconnection (PJM), a regional transmission organization (RTO), offers several demand response programs. Two specific programs may be attractive to federal facilities in PJM's northern Illinois footprint:

  • The Economic Load Response program allows electricity users to provide load reductions in exchange for a payment based on hourly wholesale electricity prices. Participation is fully voluntary. Program participants have two options: The Real-Time or Day-Ahead Option.

    • The Real-Time Option allows participants to decide at any time to provide load curtailments (with one hour notice to PJM) and receive payment based on the real-time electricity price (the "locational marginal price" in DR parlance).

    • The Day-Ahead Option permits customers to submit load reduction bids (of at least 100 kW) into the day-ahead energy market. Participants whose bids are accepted are paid for their load reductions based upon the day-ahead, hourly electricity market prices (the day-ahead LMP). Reductions are figured based on a customer baseline load (CBL), which is essentially the average load levels for the same hours in four of the facility's previous non-responding days. Retail electricity customers can participate in the program through any existing PJM member, such as their utility, a third-party electricity supplier, or a specialty curtailment service provider (CSP). Regardless of which type of firm it is, the CSP will generally offer to split the revenues with the customer at a pre-determined percentage. Customers on real-time (hourly) electricity pricing can participate, but at much less attractive remuneration terms since they are already exposed to market electricity rates.

  • PJM's emergency "capacity" program allows demand resources to participate in PJM's Reliability Pricing Model (RPM) forward capacity market via a CSP. Participants pledge to either reduce their load by a specified amount (guaranteed load drop, GLD), or to a specific kW level (known as firm service level, FSL), within one or two hours of an event notification. Load reductions are mandatory and may occur up to ten times per year, lasting up to six hours per event. Penalties for non-compliance are substantial. Remuneration is based on the results of the annual RPM capacity auctions in various PJM regions. Remuneration levels for the 2012-13 and 2013-14 PJM years (which begin June 1, 2012 and June 1, 2013, respectively) in PJM's western region (of which northern Illinois is a part) are as low as $6,000 per MW in 2012-13 and $10,000 in 2013-2014, compared to roughly $40,000 in 2011-12. Participants are also eligible to receive energy payments for actual reductions, though, if and when the program is called.

In both programs, participants can provide load reductions through curtailing electricity use or operating on-site generation consistent with local environmental regulations and permits.

Utilities in the footprint of MISO (formerly the Midwest Independent System Operator) may enroll interested customers in any of MISO's various demand response offerings, from which they can receive payments for reducing load. Federal customers should contact their local utility representative to inquire about participation.

ComEd's Smart Returns Program provides two load reduction opportunities:

  • The Voluntary Load Response Program pays customers for responding to individual load reduction requests of generally 2 to 8 hours with at least one hour notice. Participants are notified of the payment level in advance of each event and are guaranteed at least $0.25 per kWh for their reduced usage. The program is open to any customer in ComEd's service territory, although electricity generation customers of ComEd are eligible for greater incentives. To participate, a customer must have an interval meter and be able to curtail at least 10 kW of peak load.

  • The Capacity Based Load Response Rider allows customers to receive payment for load reductions. Customers must commit to at least 100 kW per load response request, and have an interval meter or some other ComEd-approved load measurement method. Participants in this program can choose from two payment schedules and two notification periods (30 or 90 minutes). Non-compliance penalties are charged for not responding to a load reduction request between June 1 and September 30.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewables and Efficiency (DSIRE) website provides information on programs in Illinois that offer incentives for renewable distributed generation. These programs may be of interest to federal customers:

The Illinois Department of Commerce and Economic Opportunity offers both rebates and grants at various times to eligible customers via its Clean Energy Program. Currently, the following programs are being offered:

  • The Solar and Wind Energy Rebate Program provides incentives for up to 50% of total project costs for public sector applicants, up to $30,000. However, the program is over-subscribed and will not resume until July, 2012 at the earliest.

  • The Biogas and Biomass to Energy Grant Program provides incentives up to 50% of the total project cost, up to $225,000 for biogas and $500,000 for biomass.

The Renewable Energy Resources Trust Fund assists government organizations to buy and install renewable energy technologies-including PV, solar thermal, wind turbines and biomass—in conjunction with improving the energy efficiency of buildings. Check the website for application deadlines.

Are there energy efficiency programs sponsored by state government?

For information on energy efficiency programs offered by the state, see the section on public purpose programs (above).

What additional opportunities are available to me?

Federal customers whose utilities have area-wide supply contracts through GSA (e.g., Atmos Energy Corporation, Ameren, ComEd, MidAmerican, Peoples Energy (North Shore Gas), and The People's Gas Light & Company), may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available on GSA's Energy Center of Expertise Library Page. Federal facilities should contact their account executive to determine the level of each utility's participation.

PJM (see above in the demand response section) now allows energy efficiency projects to participate in its forward capacity markets, based on its Reliability Pricing Model (RPM). To be eligible, EE projects must reduce load continuously by at least 100 kW during peak summer hours, and not be dispatchable. This load reduction can be bid into PJM's annual (for three years in advance) and "residual" (nearer-term) capacity auctions, and if selected will receive the auction clearing price. Interested customers can participate through energy service companies conducting ESPCs or utilities executing utility energy services contracts (UESCs) at their sites.

NOTE: Energy efficiency funds and demand response programs are updated at least annually. Please contact the FEMP webmaster if changes are needed between updates.