State of the States: Community Solar in the Midwest

Nowhere is the rapid adoption of renewable energy resources more urgent than in the Midwest United States, where electric utilities remain heavily reliant on coal. The growth of Midwest community solar can help deliver steep reductions in future US carbon emissions. Fortunately, several Midwest states have acted to support the emergence of community solar projects, thus demonstrating the broad benefits of doing so. For a primer on community solar, see my companion blog post, "The Promising Opportunity of Community Solar."

Illinois

Community solar is an integral element of Illinois’ Future Energy Jobs Act (FEJA), a multi-faceted clean energy law passed by the Illinois legislature in 2016. Community solar is relevant to two programs under FEJA—the Illinois Solar for All Program and the Adjustable Block Program. 

The Illinois Solar for All Program

The Illinois Solar for All Program aims explicitly to deliver more equitable and diverse access to the economic and environmental benefits of renewable energy. Recognizing the financial barriers to the development of solar projects and the shortcomings of existing incentives for low-income communities, communities of color, and other often-marginalized communities, Illinois has determined that eligible participants should pay no upfront costs for rooftop solar installations or for participation in community solar projects. The state has also affirmed that participation in the Program should result in immediate and consistent reductions in monthly energy costs.

As the Illinois Power Agency notes, the Illinois Solar for All Program will offer a series of direct incentives “offered through contracts for the delivery of [Renewable Energy Credits] at a premium price above what would otherwise be available.” In other words, eligible low-income and environmental justice communities will have exclusive access to financial incentives to install rooftop solar panels or participate in community solar projects.

To ensure that low-income and environmental justice communities have access to the longer-term community benefits of the clean energy economy, the Illinois Solar for All Program also establishes and mandates coordination with energy-related job training programs.

The Adjustable Block Program

The Adjustable Block Program also enables individuals and community groups to receive monetary credit (at administratively-determined prices) for the electricity that their owned or shared solar panels contribute to the grid. The Program does so by establishing a marketplace through which utilities purchase the Renewable Energy Credits associated with electricity generated by rooftop solar panels and community solar projects.

Interest in Illinois’ Adjustable Block Program’s community solar projects is extremely high—it is expected to exceed the program’s available funding and has resulted in a long line of solar arrays awaiting interconnection to the electric grid. As a result, the Illinois Power Agency and InClime, the program administrator of the Adjustable Block Program, are designing a lottery system to select the projects that will participate in the Program. While this development reflects the broad popularity and promise of community solar in the Midwest and beyond, it also suggests the need for more thoughtful program design in future community solar programs.

Minnesota

Minnesota’s 2013 Solar Energy Jobs Act established the Community Solar Gardens Program, which mandates that Xcel Energy purchase generation from community solar projects within the state. To meet this mandate, Xcel administers the Solar* Rewards Community program. Xcel does not own or operate solar arrays under this program. Instead, it agrees to procure generation from private solar developers who sell subscriptions and otherwise administer community solar projects.

Like the Adjustable Block Program within Illinois’ Future Energy Jobs Act, there has been broad interest in Minnesota’s community solar program. The program hit a record of 401 MW of operational capacity in August of 2018. There is an additional 400 MW in the program’s queue. It is worth noting that approximately 85% of projects under this program serve commercial or public entities. As such, there is a substantial need—and opportunity—for projects serving residential consumers.

As the Minnesota Attorney General notes, “While only Xcel was required to develop a community solar program, other utilities are [voluntarily] developing their own programs.” Electric cooperative utilities also own and operate community solar projects in the state.

Missouri

In October 2016, the Missouri Public Service Commission approved Ameren Missouri’s proposal to build between 500 kW and 1,000 kW of community solar capacity (the specific amount will depend on customer interest). The proposal allows residential and small-business customers to subscribe to the community solar project for up to half of their average electricity usage over the past year. This development marked the first instance of the Missouri Public Service Commission approving an investor-owned utility’s community solar project. Rural electric cooperatives have previously implemented community solar projects in the state.

Ameren Missouri has expressed that it will begin construction on the first 500 kW array once that project is fully subscribed. It will then decide whether to build the second 500 kW array. Ameren plans to build these arrays at Lambert International Airport.

Michigan, Ohio, and Iowa

Of course, substantial regional challenges remain. Michigan, Ohio, and Iowa all lack statewide community solar policies. With that said, Michigan law allows for third-party owned solar arrangements, and government entities within Michigan seem to recognize the value of community solar projects. The Michigan Energy Office, the Michigan Public Service Commission, and the Michigan Economic Development Corporation, for example, all contributed to the Great Lakes Renewable Energy Association’s “Guidebook for Community Solar Programs in Michigan Communities” publication, which extols the benefits of community solar and suggests pathways for the implementation of community solar projects in the absence of statewide program. Given these conditions, there may be a strong opportunity to introduce Michigan-wide community solar policies in the coming years.

Progress on community solar in Illinois, Minnesota, and Missouri offer promising signs for a path forward on clean energy in the Midwest. A rapid transition to clean energy resources is what the country and planet need—and what citizens demand.

About the Authors

Samuel Garcia

Schneider Fellow, Midwest Region, Climate & Clean Energy program

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