With changes made to the Inflation Reduction Act via the One Big Beautiful Bill, the long-term financial models used by states to project solar deployment volumes must now evolve. States such as Massachusetts, New York, and Illinois, which rely on projected returns including the Investment Tax Credit (ITC) to set incentive levels, will need to reassess how projects are evaluated and how legally mandated deployment targets are affected.
For example, Massachusetts’ Solar Renewable Target (SMART) program adjusts incentive levels based on installation pricing and electricity savings. As electricity prices rose in recent years, the SMART II program stopped paying incentives in some regions. The updated SMART III program has since increased incentives to reflect higher solar costs, including tariffs and interconnection fees.
In Illinois, attorney Michael R. Strong of Fox, Swibel, Levin & Carroll, LLP filed a “Verified Emergency Petition” requesting the reopening of the Illinois Power Agency’s (IPA) 2024 Long-Term Renewable Resources Procurement Plan. The filing includes a schedule of recommended actions.
The petition was filed on behalf of the Solar Energy Industries Association, the Coalition for Community Solar Access, the Illinois Solar Energy Association, and Advanced Energy United. It argues that the Climate and Equitable Jobs Act’s clean energy goals risk being undermined by the new federal legislation, and urges the Commission to act quickly to preserve Illinois’ solar momentum.
The filing contends that Illinois has a chance to take “strong and decisive action in the face of hostile legislation at the federal level.” It cites the Illinois Power Agency’s June 2025 draft of the Adjustable Block Program CREST model, which states:
While the ITC tax credit value for a particular system is based on federal law regarding what may be in the tax basis, the Adjustable Block Program CREST model for 2025-26 that the IPA put out for public comment calculates approximately $1.1 million in ITC value for a project with approximately $6.1 million in installed costs and nearly $2.5 million in ITC value for a project with approximately $13.75 million in installed costs (2.0 MWac and 5.0 MWac systems, respectively).
Strong noted that the CREST models show the ITC portion of a project’s cost stack is substantial relative to development and installation costs. The filing goes on to state that the state’s primary support mechanism, the Renewable Energy Credit (REC) program, is “specifically calibrated to set REC prices based on the difference between the IPA’s assessment of typical costs and revenues.”
The petition proposes six actions, summarized as follows:
- Expand Adjustable Block Program (ABP)
- Add up to 100% of current program size.
- EEC Block expansion: +64 MW (Group A), +169 MW (Group B).
- Effective upon Final Order on Reopening.
- Pull forward Solar for All funds
- Up to $20M from Renewable Energy Resources Fund.
- For subprograms that allow ITC monetization.
- Reallocate unused ABP capacity
- On April 1, 2026, reallocate 50% of unused capacity.
- Apply to waitlisted projects per LTRRPP §7.3.4.
- Adjust competitive REC procurements
- Allow solar–wind split flexibility.
- Fill shortfalls with cost-effective bids from other categories.
- Expand and retime large-scale procurements
- Utility-scale and brownfield REC procurements.
- Expanded capacity, results required before May 1, 2026.
- Update REC contract language
- Amend standard and existing REC contracts.
- Address risks from the Federal Act, including Summer 2025 procurements.
The petition also notes that Equity Eligible Contractors may propose an adder to REC contracts, and specifies that brownfield REC procurements should be limited to sites regulated under EPA or Illinois remediation programs.
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