By Robert Vogl and Sonia Vogl
President and Vice President, Illinois Renewable Energy Association
The Illinois Power Agency recently announced it will purchase $30 million in solar energy credits. At least half of the purchases over the next year must come from residential and small business customers. Such systems will help the state reach the mandate calling for 25% of the state’s energy coming from renewable sources by 2025.
The agency purchases electricity on behalf of utilities which then sell it to their customers. An initial purchase of $5 million solar credits is set for June followed by purchases of $10 million in November and $15 million in March, 2016.
The purchases should provide an important stimulus to renewable energy in the state along with jobs aligned with the industry. The investment stands in marked contrast to the loss of favorable policies for solar in Ohio and Wisconsin.
A new organization, the Illinois Clean Jobs Coalition, linking environmentalists, renewable energy companies and labor unions with the intent of lobbying Springfield for strengthened policies supporting energy efficiency and solar and wind power was announced on February 4. The group seeks to increase the state’s renewable energy goal to 35% by 2030, its energy efficiency standard to a 20% reduction by 2025 and promote market-based strategies to cut carbon emissions.
In a surprising move, Chicago Mayor Emmanuel joined the coalition whose goals include some resisted by Exelon, which is not a member. Exelon has opposed federal subsidies for wind power and has expressed that it plans to oppose the extension of the federal tax credit for solar which ends in December, 2016. The firm has also worked to get state and regional policies to support their earnings.
Faced with declining earnings from lower demand, low natural gas prices and wind farms, Exelon has threatened to close down three nuclear-generating stations unless the state provides financial support for them. Since nuclear power plants do not produce carbon emissions, Exelon wants the same subsidies that wind and solar receive.
An important factor in the inability of nuclear power to be economically competitive is the low price of natural gas used in generating electricity
The price is expected to rise which will reduce the economic stress on nuclear plants but the timing and extent of the price increases are uncertain. Historically the fuels for both nuclear and gas plants are subject to dramatic swings in market prices.
In contrast there are no fuel costs for solar and wind. The costs are in the technologies which are predicted to continue to decline as a result of technical improvements, increasing scale of manufacturing and lower installation costs. The systems are reliable; solar systems come with 25 to 30 year warranties. As intermittent energy sources, they will benefit from continued cost reductions in energy storage.
As wind and solar prices continue to fall, renewable energy systems will appeal to more homeowners and businesses further reducing electrical demand. The technologies are ready for widespread implementation. State and utility policies will determine how rapidly it occurs.
The competition between nuclear power and renewable energy sources will create lively sessions in the legislative halls of Springfield this spring.
Drs. Robert and Sonia Vogl are founders