Illinois' Renewable Portfolio Standard: What It Means for Your Energy Mix
Illinois has committed to one of the most ambitious clean energy transitions in the nation. The Renewable Portfolio Standard, dramatically strengthened by the Climate and Equitable Jobs Act (CEJA), mandates that the state's electricity supply become increasingly renewable over the coming decades. This guide explains what these mandates mean for Illinois electricity consumers—and how businesses can strategically leverage them for competitive advantage.
In This Article
What is the Illinois Renewable Portfolio Standard? (And Why It's Reshaping Your Energy Bill)
A Renewable Portfolio Standard (RPS) is a state policy requiring that a specified percentage of electricity sold by utilities and suppliers come from renewable sources. Illinois' RPS, originally established in 2007 and dramatically expanded by CEJA in 2021, is reshaping how electricity is generated and consumed across the state.
The Evolution of Illinois' Clean Energy Policy
Illinois' renewable energy policy has evolved through several landmark laws:
Illinois Power Agency Act (2007): Established the initial RPS requiring 25% renewable energy by 2025. Created the Illinois Power Agency to procure renewable energy on behalf of utilities.
Future Energy Jobs Act (2016): Expanded renewable programs and created Illinois Shines (the Adjustable Block Program) for distributed solar incentives. Established community solar programs.
Climate and Equitable Jobs Act (2021): Transformed Illinois' energy landscape with:
- 100% carbon-free electricity by 2045
- 50% renewable energy by 2040
- Phase-out of fossil fuel plants on defined timelines
- Major expansion of solar and wind procurement
- Focus on equity and environmental justice communities
Current RPS Requirements
Under current Illinois law, electricity suppliers must meet escalating renewable energy targets:
| Year | Renewable Requirement | Key Components |
|---|---|---|
| 2025 | 25% | Solar carve-out: 6% |
| 2030 | 40% | Increased solar and wind |
| 2035 | 50% | Major expansion phase |
| 2040 | 50%+ | Continued growth toward 100% |
| 2045 | 100% carbon-free | Nuclear + renewables |
How the RPS Works in Practice
The RPS doesn't require every electron of electricity you consume to be renewable. Instead, it operates through a system of Renewable Energy Credits (RECs):
- Renewable generators produce electricity: Wind farms, solar installations, and other renewable sources generate power
- RECs are created: For each megawatt-hour of renewable generation, one REC is issued
- Suppliers purchase RECs: Electric utilities and alternative suppliers must acquire enough RECs to meet their percentage obligation
- Compliance is verified: The Illinois Power Agency and Illinois Commerce Commission verify that suppliers meet requirements
The cost of purchasing RECs is passed through to consumers as part of their electricity rates. This creates a financial mechanism to support renewable development while allowing flexibility in how the mandate is met.
Qualifying Renewable Resources
Illinois' RPS recognizes these renewable energy sources:
- Wind power: Currently the largest contributor, with extensive wind farms in central Illinois
- Solar power: Growing rapidly through utility-scale and distributed generation
- Hydroelectric: Limited in-state but eligible from regional sources
- Landfill gas: Captures methane from decomposing waste
- Biomass: Energy from organic materials (with certain restrictions)
Notably, nuclear power—while carbon-free—doesn't count toward the renewable percentage. However, CEJA treats nuclear as an essential carbon-free bridge resource and established support programs for existing nuclear plants.
The Solar Carve-Out
Within the broader RPS, Illinois mandates that a specific portion come from solar energy. This "carve-out" ensures solar development alongside wind, which has historically been more cost-competitive. The solar carve-out drives programs like:
- Illinois Shines: Incentives for distributed solar installation
- Community Solar: Subscription-based solar for those who can't install panels
- Utility-scale solar: Large solar farms contracted through IPA procurements
From Costs to Credits: How the RPS & CEJA Directly Impact Your Business's Bottom Line
For businesses, Illinois' clean energy transition creates both costs and opportunities. Understanding these dynamics is essential for effective energy management.
RPS Compliance Costs in Your Rate
The cost of meeting RPS requirements is embedded in electricity rates. When your utility or alternative supplier purchases RECs to comply with the mandate, those costs flow through to customers:
How costs appear:
- For utility customers: Embedded in supply charges and sometimes itemized as "renewable portfolio standard" charges
- For ARES customers: Built into contracted supply rates
- Typical magnitude: $0.002-0.010 per kWh depending on market conditions
Cost trajectory: As RPS requirements increase, compliance costs may rise. However, falling renewable energy costs have moderated this impact. Wind and solar are now often cheaper than fossil fuel generation, potentially keeping RPS compliance costs stable even as percentages increase.
Grid Investments and Infrastructure Costs
The transition to renewable energy requires substantial grid upgrades that affect delivery charges:
Transmission expansion: Connecting wind-rich areas of western Illinois to population centers requires new transmission lines. These costs are spread across ratepayers through transmission charges.
Grid modernization: Integrating variable renewable generation requires smart grid technologies, battery storage, and enhanced grid management systems.
Distribution upgrades: Accommodating distributed solar, EV charging, and two-way power flows requires distribution system investments.
While these investments increase near-term costs, they're essential for achieving Illinois' clean energy goals and may reduce long-term costs by decreasing dependence on volatile fuel markets.
Opportunities from RPS Programs
The RPS creates financial opportunities for businesses willing to engage proactively:
Solar incentives: The Illinois Adjustable Block Program (Illinois Shines) provides substantial incentives for installing solar:
- Commercial systems: REC payments of $60-90 per MWh for 15 years
- Large commercial: Block-based pricing that improves project economics
- Value: Often equals 20-40% of system cost
Community solar participation: Businesses can subscribe to community solar projects and receive guaranteed savings of 10-20% on supply costs without installing anything on-site.
Demand response programs: Grid flexibility programs pay businesses to reduce consumption during peak periods, helping integrate variable renewable generation.
The Value of Green Credentials
Beyond direct financial impacts, RPS-driven programs offer reputational and market benefits:
Sustainability reporting: Verifiable renewable energy procurement supports ESG (Environmental, Social, Governance) reporting and sustainability goals.
Customer expectations: Many consumers prefer businesses that demonstrate environmental responsibility. Renewable energy use is a tangible, communicable commitment.
Supply chain requirements: Large companies increasingly require suppliers to meet sustainability standards. Renewable energy procurement helps meet these requirements.
Employee recruitment: Younger workers often prioritize employer sustainability practices. Green energy commitments can aid talent acquisition.
Comparing Supplier Green Options
When shopping for electricity in Illinois' deregulated market, you'll encounter various "green" offerings:
Standard RPS compliance: All suppliers must meet minimum RPS requirements. This baseline renewable content is included in standard rates.
100% renewable products: Some suppliers offer products backed by 100% RECs, exceeding minimum requirements. These typically carry a small premium.
Local renewable products: Premium products may feature RECs from Illinois-specific projects or support new renewable development rather than existing facilities.
Questions to ask suppliers:
- What is the REC source (wind, solar, in-state, regional)?
- Are RECs from new or existing facilities?
- How is renewable content verified?
- What premium (if any) applies versus standard products?
Unlock Savings & Meet Green Goals: 3 Ways to Strategically Leverage Illinois' Renewable Mandates
Forward-thinking businesses don't just comply with renewable requirements—they leverage them for competitive advantage. Here are three strategies for maximizing value from Illinois' clean energy transition.
Strategy 1: On-Site Solar with Illinois Shines Incentives
For businesses with suitable facilities, on-site solar offers the most direct way to benefit from Illinois' RPS:
How it works:
- Install solar panels on rooftops, parking structures, or ground mounts
- Receive upfront REC payments through Illinois Shines program
- Generate electricity that offsets grid purchases
- Receive net metering credits for excess production
- Claim federal Investment Tax Credit (30% through 2032)
Financial benefits:
- Illinois Shines RECs: $60-90 per MWh for 15 years (varies by project size and block)
- Federal tax credit: 30% of installation cost
- Energy savings: $0.08-0.12 per kWh avoided
- Net metering credits: Value of excess generation sent to grid
- Combined effect: Often achieves payback in 4-8 years
Best candidates:
- Businesses with large, unshaded roofs or land
- High daytime electricity consumption
- Stable location (plan to stay 10+ years)
- Ability to use tax credits (sufficient tax liability)
Strategy 2: Community Solar Subscriptions
For businesses without suitable on-site solar potential, community solar offers similar benefits without installation:
How it works:
- Subscribe to a share of a local solar farm
- Solar farm generates electricity and feeds it to the grid
- Receive bill credits for your share of production
- Pay subscription fee at discount to credit value
- Net result: Guaranteed savings with no equipment ownership
Typical savings:
- 10-20% savings on supply portion of bill
- No upfront cost in most programs
- Contracts typically 15-20 years
- Transferable within utility territory if you relocate
Best candidates:
- Renters or businesses in leased facilities
- Buildings with unsuitable roofs (shading, structural limitations)
- Companies wanting guaranteed savings without capital investment
- Organizations needing verifiable renewable energy for ESG reporting
Strategy 3: Strategic REC Purchasing
For sophisticated energy buyers, direct REC purchasing offers flexibility and potential cost advantages:
How it works:
- Purchase electricity from standard (non-green) supply
- Separately purchase RECs to "green" your consumption
- RECs can be purchased from brokers or directly from generators
- Retirement of RECs in your name proves renewable energy claim
Advantages:
- Flexibility to purchase exactly the type of RECs you want
- Potential cost savings vs. bundled green products
- Ability to support specific projects or technologies
- Scalable to match sustainability goals
Considerations:
- Requires more active management
- REC prices vary; timing purchases strategically matters
- Need to verify RECs are properly certified and retired
- May require working with energy consultants or brokers
Best candidates:
- Large energy users with energy management expertise
- Companies with specific sustainability requirements (in-state, new generation, etc.)
- Organizations wanting to match renewable purchases to specific facilities
Combining Strategies for Maximum Impact
Many businesses combine multiple approaches:
Example portfolio:
- On-site solar covering 40% of consumption at headquarters
- Community solar subscription for branch locations
- REC purchases to reach 100% renewable for remaining consumption
This layered approach maximizes financial savings from on-site generation while ensuring complete renewable coverage for sustainability reporting.
The Future Is Now: Preparing Your Business for Illinois' 2030 & 2040 Energy Milestones
CEJA establishes aggressive timelines for Illinois' energy transition. Businesses that plan ahead can position themselves advantageously as these milestones approach.
2030: 40% Renewable Energy
By 2030, Illinois must source 40% of electricity from renewable sources. This milestone will drive:
Major infrastructure development:
- Significant new wind and solar installations across the state
- Transmission line construction to connect renewable resources
- Grid modernization investments
- Energy storage deployment
Market implications:
- Continued demand for RECs supporting renewable project economics
- Potential for electricity rate volatility during transition
- Growing market for flexible demand and storage services
- Expansion of community solar and distributed generation programs
Business preparation:
- Lock in favorable supply contracts before potential rate increases
- Invest in energy efficiency to reduce exposure to rate changes
- Consider on-site generation to hedge against grid electricity costs
- Develop demand flexibility capabilities to capture grid service revenues
2035: 50% Renewable and Fossil Plant Closures
The 2035 milestone includes both the 50% renewable target and the scheduled closure of most coal plants:
Coal plant timeline under CEJA:
- 2030: All privately-owned coal plants to close
- 2035: CWLP Springfield coal plant to close
- 2038: Remaining municipal coal plants to close
Natural gas plant timeline:
- 2030: Initial emission reduction requirements
- 2035: Stricter emissions limits
- 2040: Begin phase-out of gas generation
- 2045: All gas plants to close or convert to carbon-free fuels
Implications for businesses:
- Supply mix will shift dramatically; understand your supplier's source
- Capacity costs may rise as dispatchable plants retire
- Grid reliability mechanisms will evolve
- Energy storage and demand response become more valuable
2045: 100% Carbon-Free Electricity
Illinois' ultimate goal is 100% carbon-free electricity by 2045. This includes renewables plus nuclear power:
Role of nuclear:
- Illinois is America's largest nuclear power state
- Nuclear provides approximately 50% of current generation
- CEJA support keeps nuclear plants operating as clean baseload
- Nuclear + renewables = 100% carbon-free goal
Achieving the final mile:
- Advanced renewables (offshore wind, next-gen solar)
- Long-duration energy storage
- Green hydrogen for backup generation
- Enhanced transmission interconnections
- Demand-side flexibility at scale
Positioning Your Business for Success
Forward-looking businesses should consider:
Short-term (2025-2030):
- Audit current energy use and costs
- Evaluate on-site solar while Illinois Shines incentives remain strong
- Develop energy efficiency roadmap
- Explore community solar for facilities without on-site potential
Medium-term (2030-2035):
- Consider energy storage investments as costs decline
- Develop demand flexibility capabilities
- Plan for electrification of vehicles and heating
- Update sustainability goals to align with state trajectory
Long-term (2035-2045):
- Plan facility investments assuming 100% clean grid
- Consider on-site microgrids for resilience
- Position for grid service revenues from flexibility assets
- Align corporate sustainability with Illinois leadership
For more information on current electricity options in Illinois, explore our electricity rate comparisons and CEJA impact analysis.
Frequently Asked Questions
As of 2025, Illinois' RPS requires approximately 25% of electricity to come from renewable sources. The actual percentage varies by supplier, with some exceeding minimums. Wind power is the largest contributor, followed by growing solar capacity. By 2030, the requirement increases to 40%, and by 2040, to 50%.
RPS compliance costs are embedded in your electricity supply rate. Utilities and alternative suppliers purchase Renewable Energy Credits (RECs) to meet requirements, and these costs flow through to customers. Currently, this represents roughly $0.002-0.010 per kWh. As renewable energy costs have fallen, RPS compliance has become less expensive than initially projected.
No, nuclear power doesn't count toward Illinois' Renewable Portfolio Standard percentages. However, nuclear is essential to Illinois' 100% carbon-free by 2045 goal. CEJA treats nuclear as a carbon-free bridge resource and established support programs to keep existing nuclear plants operating. The combination of nuclear (~50% of generation) plus renewables (growing toward 50%) achieves the 100% carbon-free target.
RECs are tradable certificates representing the environmental attributes of one megawatt-hour of renewable energy generation. When a wind or solar facility generates power, it creates both electricity (sold on the grid) and RECs (sold separately). Buying RECs allows companies to claim renewable energy use even if the physical electrons they consume aren't renewable. RECs are the mechanism by which suppliers demonstrate RPS compliance.
Illinois Shines (the Adjustable Block Program) provides upfront payments for solar installations in the form of REC purchases. Commercial projects receive payments of $60-90 per MWh for 15 years based on estimated production. For a typical commercial installation, this can equal 20-40% of system cost. Combined with federal tax credits and energy savings, solar projects can achieve payback in 4-8 years.
Rate impacts are complex and uncertain. While grid investments will add costs, declining renewable energy prices may offset them. Nuclear support costs add to rates but prevent even higher replacement costs. Long-term, clean energy may reduce costs by eliminating fuel price volatility. Most projections suggest moderate, manageable rate increases rather than dramatic spikes, though individual customer impacts vary.
Conclusion: Embracing Illinois' Clean Energy Future
Illinois' Renewable Portfolio Standard represents one of the most ambitious clean energy commitments in the nation. The path from 25% renewables today to 100% carbon-free by 2045 will transform the state's electricity system—and create both challenges and opportunities for businesses.
Understanding the RPS framework empowers businesses to make informed decisions about energy procurement. Whether through on-site solar installation, community solar subscription, strategic REC purchasing, or simply choosing suppliers with strong renewable portfolios, businesses have multiple pathways to align with Illinois' clean energy trajectory.
The financial case for engaging proactively is compelling. Illinois Shines incentives make solar installation remarkably affordable. Community solar delivers guaranteed savings with no upfront cost. And establishing green credentials now positions businesses favorably as customers, employees, and supply chain partners increasingly prioritize sustainability.
As the 2030, 2035, and 2045 milestones approach, early actors will be best positioned. Those who invest in efficiency, develop demand flexibility, and integrate renewable generation will be insulated from rate volatility while potentially capturing grid service revenues. Those who wait may face higher costs and more limited options.
The clean energy transition is not optional—it's Illinois law. The choice for businesses is whether to be passive participants or strategic beneficiaries of this historic transformation.