Energy Incentive Programs, Illinois

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Updated June 2015

Illinois utilities collectively budgeted almost $330 million for energy efficiency and load management programs in 2014.

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

In response to 2007 legislation creating the state’s energy efficiency portfolio standard, the Department of Commerce and Economic Opportunity (DCEO) launched several new energy efficiency programs aimed at public sector consumers. The Illinois Energy Now program provides financial incentives specifically for qualified public sector projects in the Commonwealth Edison, Ameren Illinois, Nicor Gas, Peoples Gas, and North Shore Gas service areas. Check the site for coverage and funding availability, but programs offered include:

  • The Standard and Custom Incentive program cover energy-efficient lighting, HVAC, gas, variable speed drives, and kitchen equipment. Custom incentives are also available at $0.12/kWh of first-year savings or $3.00/therm.

  • The New Construction program, which provides grants for new buildings that achieve energy efficiency beyond code-required thresholds. Programs pursuing LEED certification will also qualify. Incentives are in dollars per square foot and rise with increasing percentage savings over code.  

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

  • The Energy Efficiency Aggregation program is intended for applicants who wish to combine multiple electric and natural gas energy efficiency measures. The intent is to reach public-sector entities that may not apply for stand-alone projects. 

  • The Public Sector Natural Gas Boiler Tune-Up program provides a $0.50/MBtu/h output (up to $1,500) incentive for energy savings attributable to a boiler tune-up. Additional incentives are available if efficiency opportunities are identified during the tune-up, such as steam trap repairs and pipe insulation repair/replacement. $200-$600 incentives are available for steam trap repairs and between $8/ft and $20/ft for pipe insulation repair/replacement (depending on nominal pipe size). 

  • A Combined Heat and Power (CHP) pilot program also offers a design incentive of $75/kW capacity, a construction incentive of $175/kW capacity, and a production incentive of either $0.06/kWh or $0.08/kWh, depending on HHV (high heating value).

In addition to these programs, 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.

The DCEO Smart Energy Design Assistance Center maintains a Quick Reference Guide, which details all electric and natural gas efficiency incentives available to customers of Illinois utilities.

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, retro-commissioning, refrigeration, HVAC units, compressed air systems, data center equipment, lab equipment, food service equipment, transformers, battery chargers, and variable speed drives. Funds are available on a first-come, first-served basis. 

  • Custom incentives of up to $0.07/kWh of first-year savings are also available for improvements in system efficiency resulting in permanently reduced consumption. ComEd offers an Early Commitment option that pays $0.06 per kWh of estimated first-year savings as soon as the application is approved (only available for projects estimated to save greater than 500,000 kWh). Because pre-approval is necessary to receive incentives, contact ComEd before beginning work.

  • The New Construction program offers design assistance and incentives for new construction, additions, or major renovations to existing buildings. As part of this program, project designers can consult with energy-efficiency technical experts at no cost. These consultations will help identify efficiency improvements, available incentives, and opportunities to lower the building’s operational cost. Access to whole building energy modeling software is also included. Engaging with ComEd early in the design process is recommended; projects already in the construction phase are ineligible for this assistance.

  • ComEd offers Building Retro-commissioning, which includes no-cost energy audits and the installation of low- and no-cost efficiency measures. Both electric and gas measures are included. To qualify, facilities must have a peak demand greater than 500 kW. Building owners also must commit to spend a minimum of $15,000-$30,000 (depending on project size) on implementation of identified measures that have a simple payback of 18 months or less.

  • ComEd also provides Data Center Efficiency Analysis, which assists customers in identifying energy-savings opportunities. Savings projects are incentivized at a rate of $0.05 to $0.07/kWh, for first-year savings, depending on the measures and timing of customer commitment. Incentives can cover up to 100% of the incremental cost and 50% of the total project cost. 

Ameren Energy offers its business customers a variety of incentives through the Act On Energy program:

  • Standard incentives include prescriptive rebates for efficient lighting, HVAC, VFD, steam boilers, water heaters, steam traps, and refrigeration. 

  • Custom incentives are available at $0.06/kWh of first-year savings for lighting projects and $0.07/kWh for all other electric measures ($500,000 maximum). Gas efficiency projects are eligible for an incentive of $1.00/therm of first-year savings ($250,000 maximum). Incentives cannot be more than 50% of the incremental cost for any project and pre-approval is required.  

  • The Retro-Commissioning program provides an evaluation of opportunities for no- and low-cost efficiency measures by an Ameren-approved Retro Commissioning Service Provider (RSP).

  • Incentives for compressed air system leak surveys and repairs are available; pre-approval is required for incentive requests over $10,000.

  • Feasibility studies of efficiency projects are subsidized up to 50% (maximum $10,000 or 25% of the estimated savings). External contractors must be used to complete the study.

MidAmerican Energy Company offers energy efficiency programs through their EnergyAdvantage initiative. A multitude of prescriptive rebates are available for energy-efficient equipment including lighting, various heating and cooling equipment, motors, variable speed drives, commercial kitchen equipment, building insulation, and windows. In addition to the standard rebates, Mid-American offers custom incentives for 25% of the incremental cost of the equipment or a post-incentive simple payback period equal to 25% of the installed equipment’s estimated useful life (EUL). Pre-approval for custom incentives is required. Other energy efficiency incentive programs that may interest federal customers include:

  • The Commercial New Construction program offers free energy design assistance and a design team incentive between $1,000-$8,500, depending on the project intensity and program involvement. Construction incentives range from $0.05 to $0.14/kWh and $0.50 to $1.40/therm for first-year savings, increasing as energy savings percentage increases.

  • The Commercial Energy Solutions program offers a comprehensive energy assessment with recommended projects for energy savings. Bonus incentives are available when multiple projects are completed and direct-install measures are available for small businesses. 50% of the cost of a building tune-up survey for small buildings or a retro-commissioning study for large buildings is covered through the program. Additional incentives are available based on savings from implemented projects and pay $0.05/kWh or $0.20/therm of first-year savings. 

  • The Industrial Partners program offers technical assistance that includes a no-cost facility energy assessment, implementation support, and no-cost system optimization studies in certain cases.  Bonus incentives are available when multiple projects are completed.

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:

  • PJM’s emergency "capacity" program allows demand resources to participate in PJM’s Reliability Pricing Model (RPM) forward capacity market via a curtailment service provider (any existing PJM member, such as their utility, a third-party electricity supplier, or a specialty 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 2016-17 PJM year (which begins June 1, 2016) are in the $22,000 per MW range for Illinois customers. Participants are also eligible to receive energy payments for actual reductions, if and when the program is called. 

  • 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. Customers start by submitting load reduction bids (through their CSP) 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 “locational marginal price," or LMP). Reductions are figured based on a customer baseline load (CBL), which is essentially the average loads for the same hours in four of the facility's previous non-responding days. 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. 

In both programs, participants can provide load reductions through curtailing electricity use or by 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 offers the Voluntary Load Response Program, which pays customers for responding to individual load reduction requests of generally two to eight 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.

MidAmerican energy offers its EnergyAdvantage Curtailment program to commercial and industrial customers in Rock Island, Henry, Mercer, or Whiteside counties who are able to reduce load by a minimum of 250 kW during peak demand periods. Curtailments take place between June and September and typically start at 1 PM, lasting approximately six hours. Curtailment calls are generally twelve (but as little as two) hours in advance of required reductions. Curtailment incentives are based on the contracted kW reduced during peak periods and are payable as rebates at the end of the peak energy season.  

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 eligible customers both rebates and grants for renewable energy projects at various. Check site for current programs and application deadlines. 

  • The Renewable Energy Resources Trust Fund assists government organizations to buy and install renewable energy technologies including PV, solar thermal, wind turbines and biomass. 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, 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 in GSA’s Energy Division Library. Federal facilities should contact their account executive to determine the level of each utility's participation.

PJM (see above in the demand response section) 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 prices. EE reductions are eligible for four years’ worth of participation. Interested customers can participate through energy service companies conducting ESPCs or utilities executing utility energy services contracts (UESCs) at their sites.