Southern Illinois lands solar investment as state ramps up renewables

Like many places across Southern Illinois, Perry County is most strongly associated with coal mining when it comes to energy production.

Three mines still remain in the county, but lately, it’s started to emerge as something of a hotbed for solar energy projects.

An area northwest of Pinckneyville was identified this month as the future site of the Prairie State Solar Project, a 99-megawatt array that will generate electricity for nearly 15,000 homes — more than doubling the state’s existing solar capacity.

The nearly $100 million project arises from Illinois’ escalating commitments to renewable energy outlined by the Future Energy Jobs Act — the state’s landmark energy bill passed in late 2016. Industry experts say its policy goals are helping position Illinois as a leader for utility-scale solar deployment across the Midwest.

The Perry County project will sell power to customers of Wabash Valley Power, an Indianapolis-based energy provider for electric cooperatives in Indiana, Illinois and Missouri. It is slated to break ground in late 2019, with the start of commercial operation targeted for 2021, according to Lee Wilmes, a Wabash Valley Power executive vice president.

The array will cover hundreds of acres and be developed on private land by New York-based Ranger Power. The company says it is pursuing solar projects in seven Midwestern states, but that the policies in Illinois have advanced progress the farthest.

“Illinois has just been pretty aggressive in terms of their Renewable Portfolio Standard,” said Rosanne Koneval, Ranger’s development manager. “That moved our timeline quickly for Perry County.”

Under the Future Energy Jobs Act, the state must get at least 4,300 megawatts of power from wind or solar by 2030. Last year, Ranger won a bid through the Illinois Power Agency, which oversees the state’s gradual procurement plan for renewables, opening the door for its Perry County project.

The price was enticing enough for Wabash Valley Power to sign a 30-year commitment to buy the facility’s output at a specified, but undisclosed, rate.

“It brought in a very economic, long-term fixed price to our power supply portfolio,” said Wilmes, adding that the Perry County project is the company’s first solar facility.

Industry experts say the project is part of a trend that figures to make Illinois one of the “big stories” in Midwestern solar production for the foreseeable future.

“A lot of it is certainly a result of the Future Energy Jobs Act,” said Sean Gallagher, vice president of state affairs for the Solar Energy Industries Association.

“There’s a lot of activity going on now to implement that bill,” he added. “You’re starting to see big projects.”

By 2030, he expects that the bill will “lead to 2,500 to 3,000 megawatts” of new solar power in the state.

The Perry County project is moving forward despite recently enacted tariffs expected to sap momentum across the industry, which relies largely on imported solar panels. For months, uncertainty from the mere prospect of a tariff had driven prices higher — leading to some project cancellations and casting doubt on future solar development.

 

Representatives from Ranger said the company braced for the worst and “conservatively modeled” for costs of panels at its project in Perry County and elsewhere.

“We planned for it and we think the additional costs won’t prevent us from pursuing these projects moving forward,” said Koneval.

Gallagher says the industrywide extent of the tariff is “still coming into focus.” Ranger, though, sounds undeterred, forging ahead with plans across the Midwest.

Why Missouri lags Illinois

While it may be natural for Missourians to wonder why similar solar developments aren’t happening on their side of the Mississippi River, an entirely different set of rules governs Illinois’ energy landscape — making any direct comparisons tough.

For one, the energy sector is deregulated in Illinois, meaning the state does not have a system like that in Missouri, where monopolized utilities are guaranteed a certain rate of return and need to seek regulatory approval for projects and services paid for by customers.

But Missouri also lacks sweeping directives like the Future Energy Jobs Act, which some say is needed to steer change and innovation.

“Markets and policy work together,” said Ashok Gupta, a Kansas City-based energy economist with the Natural Resources Defense Council. “You need to look ahead and create some policy and regulatory certainty that encourage the direction of the market.”

“Is the government’s role to help certain innovation?” added James Owen, executive director of Renew Missouri, an organization that advocates for increased adoption of renewable energy in the state. “I think yes, the government should be looking at how to move our country, our economy forward.”

Owen and Gupta both touted the long-term benefits of solar, which, through savings enabled by the absence of fuel costs or its attractiveness to businesses, are as much economic as environmental.

But even as a state with regulated energy markets, Missouri could find ways to accelerate its own shift toward renewable energy. One method could be through a refinancing process called securitization, which aims to address utilities’ central dilemma of swapping existing generation that’s still being paid off with newer, cheaper generation from wind or, to a lesser extent, solar.

“Twenty-five other states do that,” said Gupta, adding that securitization bills have been introduced in Jefferson City to add Missouri to the list.

Solar projects could also lurch forward on their own in Missouri, albeit at a slower pace than in Illinois. Ranger, for instance, said it is doing early-stage planning for utility-scale projects in the state. Some say other developers have shown interest too, but are waiting to see what Missouri’s regulators and big utilities are willing to commit to.

“There’s a lot of utility-scale solar looking at Missouri,” said Owen. “I think they’re waiting to see if there’s a willingness there.”