Understanding the Future of Solar Net Metering in Illinois: What to Expect in 2025 and Beyond

With Illinois changing its policy on net metering for 2025 and beyond, Ameren Illinois customers have a lot of questions about how this transition away from net metering will affect billing changes and incentives going forward. So, let's break down some key changes and what route may be best for you.

Changes in Illinois Solar Net Metering Policy

The plan for a new Illinois solar net metering schedule was included in the Climate and Equitable Jobs Act in 2021 to eliminate the uncertainty of when the net metering cap for each utility would be reached. Customers whose solar system is installed on or after January 1, 2025, will still be credited at the full retail rate, but credits for excess generation will only be applied to supply and transmission charges on their bill rather than the total amount (which includes the demand charge). Homeowners and businesses installed prior to January 1, 2025, also known as legacy systems, will still retain their current net metering status for 30 years and their credits will still apply to supply, transmission, and delivery charges on their bill. Customers with existing solar energy systems installed before 2025 will have to switch to this new billing structure if they choose to claim the solar generation and/or battery rebate.

So, customers with existing solar energy systems under the NM-Net Metering rider (installed before January 1, 2025) will have to decide if the value of the rebate(s) outweighs the difference in the application of their net metering credits.

Generation & ESS Rebates

Ameren Illinois has recently completed the necessary programming to implement renewable generator (solar generation) and energy storage system (ESS, or battery) rebates for those who use smart inverters to interconnect to Ameren's electric grid in Illinois. This allows Ameren Illinois customers to realize even more savings on their solar system, even if it has already been installed. Ameren customers with solar energy systems and/or ESS (batteries) can claim the rebate through Ameren's website.

Smart Inverter Rebate (Solar Generation)

The rebate for smart inverters used to interconnect your solar system is based on your solar system's kWDC nameplate. The rate for residential (DS-1) and small commercial (DS-2) customers is currently $300 per kWDC. The rebate rate for large commercial and industrial (DS-3, DS-4, & DS-6) customers is $250 per kWDC.

Energy Storage Systems Rebate (ESS, or Batteries)

The nameplate of your energy storage system's kWh storage capacity is what determines your ESS rebate. Residential and small commercial customers' rates for connecting ESS or batteries are $300 per kWh while large commercial and industrial customers' rates are $250 per kWh. Residential customers (DS-1) who choose to take the ESS rebate will have to choose between three different riders: Peak Time Rewards (PTR), Real Time Pricing (RTP), and Power Smart Pricing (PSP). Small commercial customers (DS-2) will be required to receive service under the Real Time Pricing (RTP) rider. You can learn more about the different billing options from Ameren.

How Do the New Changes Affect Solar Costs?

After reviewing the key changes to the new Illinois net metering policy, let's walk through an example of what a system could cost after the rebate(s). Our residential homeowner would like to install a 10 kWDC system with a Tesla Powerwall 3, which has a built-in smart inverter and 13.5 kWh of battery storage capacity.

After the 30% federal tax credit, the Illinois Solar Renewable Energy Credit (SRECs), the Illinois Smart Inverter rebate, and the Illinois ESS rebate, the net cost of this example solar system would be:

1. Solar PV Cost: $45,000

2. 30% Federal Tax Credit: $13,500

3. Illinois SRECs: $11,000

4. Illinois Smart Inverter Rebate: 10 kWDC x $300/kWDC = $3,000

5. Illinois ESS Rebate: 13.5 kWh x $300/kWh = $4,050

Total Net Cost = $13,450

*By taking the smart inverter and ESS rebate, the homeowner will have to choose between the three billing options: Peak Time Rewards (PTR), Real Time Pricing (RTP), and Power Smart Pricing (PSP).

Sources

“The Climate & Equitable Jobs Act.” Citizens Utility Board, 7 Dec. 2021, www.citizensutilityboard.org/climate-and-equitable-jobs-act/. Accessed 27 Nov. 2024.

“Distributed Generation: Ameren Illinois.” Distributed Generation | Ameren Illinois - Ameren Illinois, www.ameren.com/illinois/residential/supply-choice/renewables/rebates. Accessed 27 Nov. 2024.