State of Illinois Programs & Grants Energy Efficiency Portfolio. Low Income Grant Programs Renewable Energy American Reinvestment and

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1 February APEC Meeting Normal, Illinois

2 State of Illinois Programs & Grants Energy Efficiency Portfolio Programs Low Income Grant Programs Renewable Energy American Reinvestment and Recovery Act (ARRA) Programs Federal Tax Incentives Commercial Buildings Others Renewables, etc.

3 $120 $100 $108.7 $112.2 $101.3 $80 millions $60 $40 $20 $0 $12.5 $5.0 $3.0 EEPS SEP EECBG RERP EETF Energy Star

4 Energy Efficiency Portfolio Standard (EEPS) In 2007, legislation that amended the Illinois Public Utilities Act required that the State s largest utility providers and the Department of Commerce & Economic Opportunity (DCEO) develop a portfolio of electric energy efficiency programs to meet defined legislative e goals. Applies only to ComEd & Ameren Illinois electric service territories. Natural Gas EEPS starts in 2011.

5 EEPS is a group of energy efficiency programs that provide for incentives in the form of rebates and/or grants for ComEd and/or Ameren Illinois utility customers to encourage them to purchase and install high efficiency equipment and systems to reduce electricity use. Sets goals of 0.2% reduction in electricity load, rising to 2.0% reduction by 2015 Increases state energy efficiency funding from $3 million to ~$200 million plus Provides for independent evaluation of the programs 75% ComEd & Ameren Illinois, 25% DCEO Will bring Illinois up to funding levels equivalent to other significant national programs

6 Year Funding Level DCEO Share 2008 $53.2 million $12.9 million 2009 $109 million $26.4 million 2010 $172 million $41.6 million $235 million $57 million Public Benefit Funds from ComEd & Ameren Illinois Electric utility customer s rider on electric bill effective June 1, 2008.

7 DCEO Public Sector ComEd/Ameren Electric Utilities Local Governments Privately owned Businesses Municipalities Privately owned Industrial & Townships & County Facilities Commercial Facilities Special Units of Local Private Schools Government Private K-12 Schools Library & Park Districts Private Colleges Public Safety Private Universities Water Reclamation Districts Not-for-profit State and federal agencies Museums Public Schools Foundations Trade Organizations K-12 Public Schools 501C3 Public Community Colleges Residential Public Universities

8 Prescriptive Incentives Provides a menu of incentives for common commercial and industrial efficiency measures including lighting technologies, motors, HVAC, and refrigeration (incentives are fixed and are paid on a per-unit basis). Visit it i for more information. Custom Incentives Available for retrofit or major energy saving measures not included in the list of qualified prescriptive measures. Covers more complex measures including industrial improvements. Incentives range from 3 to 7 cents per annual kwh saved. Visit for more information.

9 Retro-Commissioning Provides expert building analysis at no cost through a systematic evaluation of energy-using systems. Can identify opportunities for customers to: Improve outside air control and indoor quality Eliminate hot or cold spots Optimize chiller or other equipment operation Reduce supply air temperature and fan speed in air handling units handling units Visit for more information.

10 New Construction Provides new construction assistance and incentives to building designers, architects and building owners for surpassing standard new construction building practices. Two track approach allows customers in various stages of design to participate in the program: Buildings in early design can take advantage of whole building modeling and incentives. Buildings that have completed their design will be able to qualify by specifying more efficient technologies. qualify by specifying more efficient technologies. Visit for more information.

11 Prescriptive Incentives Lighting / Refrigeration / Motors / HVAC Systems Commercial Kitchens Custom Incentives For businesses that incorporate energy-efficient efficient design or high-performance equipment into their operations: Payback in annual energy savings. Calculations and documentation for the estimate of energy saved. Pre-approval from the Ameren Illinois Utilities before purchasing equipment. $0.05/kWh for lighting, all other $0.07/kWh (1-7 year payback).

12 Small Business HVAC Air Conditioner Tune-up $25/ton cooling Gas Boiler Tune-up $0.50/kBtuh input Gas Furnace Tune-up $0.50/kBtuh input Gas Boiler Replacement (AFUE 85%) $1.00/kBtuh Gas Boiler Replacement (AFUE 90%) $2.00/kBtuh Gas Furnace Replacement (90%+ AFUE) $2.00/kBtuh Gas Furnace Replacement (92% AFUE) $2.50/kBtuh Gas Furnace Replacement (94% AFUE) $3.00/kBtuh

13 Multifamily Properties Common Area Lighting Program offers financial incentives when you make the following lighting upgrades to your property's common areas: Upgrades and retrofits of lighting fixtures Replacement of incandescent bulbs with CFLs Installation of occupancy sensors Replacement/retrofit of inefficient exit sign lighting g In-Unit Energy-Efficiency Program offers these free products for each unit: Water-conserving/saving shower heads Compact fluorescent light bulbs (CFLs) Faucet aerators Water pipe insulation

14 Retro Commissioning Two Programs Compressed Air Retro Commissioning Manufacturing and industrial customers may optimize the operation of their compressed air systems. Healthcare Retro Commissioning Healthcare facilities may optimize the operation of their existing lighting, HVAC and energy management systems. Programs typically defray 50 to 80 percent of the discovery phase of tune-up projects that have a simple payback period of up to one year.

15 Grocery/Convenience Stores The typical grocery store spends up to 60 percent of its energy bill on refrigeration needs. Incentives may be available for the following improvement measures and more: LED lighting and controls for refrigerator/freezer cases Night curtains for open coolers Automatic door closers for walk-in coolers and freezers Energy-saving door gaskets Tune-ups on refrigerators and freezers New Construction This new program will provide financial incentives and technical project assistance for energy-efficient building design and construction projects. Coming in 2010.

16 Standard Incentive Program Custom Incentive Program New Construction Program Retro-commissioning Pilot Program

17 Provides grants and rebates to public sector entities for a specific list of equipment upgrades. Includes electric system efficiency improvements for: Lighting Equipment HVAC Equipment Refrigeration Equipment Motors and Drives LED traffic signals (DCEO only)

18 Approx 40% energy savings Standard incentive = $7.50 per lamp and ballast incentive Delamp = $6.50 Delamp and add reflector = $13 More light Better quality

19 400 watt metal halide to premium T8 or T5 HO fixtures 25% to 50% energy savings Standard Incentive = $0.44/Watt saved Instant on and off More likely to be turned off when not used incentive = $108 per fixture =(460W -215W)(0.44)

20 70% to 90% savings Standard Incentive = $22/sign Maintenance savings

21 Public Sector Energy Efficiency Custom Incentive Program Projects that involve non-standard incentives and other unique projects Electric efficiency improvements not captured by the standard d program $0.08 per kwh savings for measures with 1-7 year payback on first year kwh savings New lighting systems that operate 24/7 Exterior lighting for demonstration of breakthrough g g g equipment may receive an incentive of $0.20 per kwh.

22 Funding Ameren ComEd Level Electric Utilities Year 2 Budget $3.8 million $10.6 million Remaining $1.8 million $6.9 million Year 2 for projects that are completed between 6/1/09 and 5/31/10. Year 3 funds will be available for projects completed 6/1/10 5/31/11.

23 Provides grants to public sector entities to encourage applicants to design new or rehabbed buildings to achieve the highest level of energy efficiency. Incentive for new construction or remodeling facilities 15,000 sq. ft. that exceed the Illinois Energy Conservation Code for Commercial Buildings (or other applicable code). Option of $0.05/kWh for constructing single components beyond code. Measure Incentive Cap 10% Beyond Code (kwh) $0.20 per sq. ft. $200, % Beyond Code (kwh) $0.40 per sq. ft. $200,000 20% Beyond Code (kwh) $0.60 per sq. ft. $200,000 25% Beyond Code (kwh) $0.80 per sq. ft. $300,000 30% Beyond Code (kwh) $1.00 per sq. ft. $300,000

24 Provides public sector funding to identify and implement low cost tune-upsups and adjustments to existing building operating systems with a focus on HVAC and building control systems. Delivered through a trained network of retrocommissioning (RCx) providers. DCEO will work with the utilities to use the same program administrator and RCx providers. Year 2 will fund a few pilot projects.

25 Low Income Energy Efficiency Programs Affordable Housing Energy Efficient Construction Program Supports energy efficiency in new construction and gut rehab. A per unit incentive for developers of affordable housing that commit to a complete list of efficiency measures. Expanded to for-profit developers in addition to not-for-profits. Low Income Energy Efficient Residential Retrofit Partners with state agencies, local governments, & affordable housing developers that administer weatherization or other low income home improvement programs to add electric energy efficiency measures efficiency measures. Efficient Living Program for Illinois Public Housing Authority

26 Fuel-switching (i.e., from oil or natural gas to electric equipment), renewable, or combined heat and power technologies do not qualify for incentives. Ineligible Measures Fuel switching Solar / Wind projects (other incentives available) Residential applications (other incentives available) Onsite Generation Peak Shifting

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28 Standard Incentive Program Custom Incentive Program Mike Genin

29 Rebates and grants available to businesses, public sector, non-profit entities, and residential customers that pay into the Renewable Energy Resources and Coal Technology Development Assistance Charge: 30% of total project cost available for residential & business. 50% of total project cost available for public sector and non-profit profit. $50,000 maximum award. 29

30 American Recovery and Reinvestment Act (ARRA) Stimulus Programs

31 $101 million Solicitation Closed Oct. 26 Renewable Energy Production $20M Community Renewable Energy Program $10M Green Industry Business Development $30M Next Generation Biofuels Production $10M Solicitation Closed Oct. 1 Green Roofs Grant $1M Electric Energy Efficiency i Program $5M Thermal Efficiency for Public Facilities $7M Large Customer Energy Efficiency $17M

32 52 Cities, $53.7 State, $8.7 Small Cities, $ Counties, $36.6 Formula based grants from DOE to: Illinois counties with a population > 200,000 Illinois communities with a population >35,000 the State for smaller communities & state programs o $13M to Illinois Regional Planning Agencies

33 $12.3 million 3 Phases Heating and Cooling Rebates Water Heater Rebates Appliance Rebates

34 Heating and Cooling Rebates targeted to open 1/31/10: Central Air-Conditioners ($500 discount at time of purchase) Air-Source Heat Pumps ($1,000 discount at time of purchase) Propane Furnaces ($350 discount at time of purchase) Gas Furnaces ($350 discount at time of purchase) Gas Boilers ($1,200 discount at time of purchase) Not retroactive, efficiency requirements. i li

35 Water Heaters (25% markdown at point of sale) targeted t to open 1/31/10: Gas-condensing Water Heaters Electric Heat Pump Water Heaters Gas Storage Water Heaters Gas Tankless Water Heaters Not retroactive, efficiency requirements

36 Appliances (15% markdown at point of sale) targeted for April 16-25, 2010: Clothes Washers Dishwashers Refrigerators Freezers Room Air Conditioners Not retroactive, ti must be ENERGY STAR qualified. org/appliances

37 Haul-Away & Recycling Rebates An additional mail-in rebate of $50-$100 will be available upon haul-away away and recycling of the old unit. Required forms are Proof of haul-away, mail-in recycling rebate form, copy of receipt from purchase of new unit. Clothes Washers ($50 Recycling Rebate) Dishwashers ($50 Recycling Rebate) Full Size Refrigerators ($100 Recycling Rebate) Freezers ($100 Recycling Rebate)

38 Link Information DCEO Energy Programs: guidelines, RFPs, contacts, applications, and other resources Info on Ameren Illinois ActOnEnergy Business Programs Info on ComEd Smart Ideas Business Solutions Programs EEPS Information for DCEO, ComEd and Ameren EEPS programs Smart Energy Design Assistance Center: Technical assistance for businesses and public sector providing energy information, news and trainings, energy service provider list DCEO Recycling Programs for local government, businesses and non-profits IL Clean Energy Community Foundation: grants for energy efficiency, renewable energy and natural areas for local government and non-profits

39 The Energy Policy Act of 2005 (EPAct 2005) is the first effort of the U.S. government to address energy policy since the Energy Policy Act of EPAct 2005 has since been modified by: The Energy Independence & Security Act of The Energy Independence & Security Act of The Emergency Economic Stabilization Act of 2008 The American Reinvestment & Recovery Act of 2009.

40 Tax incentive for commercial buildings: A tax deduction of up to $1.80 per square foot is available to owners or tenants (or designers, in the case of government- owned buildings) of new or existing commercial buildings that are constructed or reconstructed to save at least 50% of the heating, cooling, ventilation, water heating, and interior lighting energy cost. The building must meet ASHRAE Standard Only buildings covered by ASHRAE Standard d are eligible. ibl Partial deductions of $.60 per square foot can be taken for improvements to one of three building systems that reduce total heating, cooling, ventilation, water heating and interior lighting energy cost by a certain percentage the building envelope (10%), lighting (20%), or heating and cooling system (20%).

41 An interim system-specific goal for lighting g is provided directly in the legislation and is valid until the IRS issues a final regulation. The interim lighting provision allows prorated deductions from 30 cents to 60 cents per square foot for lighting systems as described below. These deductions are available for buildings or systems placed in service from January 1, 2006, through December 31, The building must be modeled based on Appendix G of ASHRAE Std using the Performance Rating Method.

42 ergy.gov/buildings/ info/tax_incentives.html

43 Taxpayer must obtain certification with respect to the property. Certification must be provided by a qualified individual (PE or licensed contractor). Taxpayer is not required to attach certification to tax return. Income Tax Regulations require taxpayer to maintain books and records sufficient to establish the entitlement to any deduction claimed.

44 In the case of privately owned buildings, the tax deduction is earned by the owner or person or entity that paid to have the building constructed or renovated. In the case of publicly owned (Federal, State, or local government or a political subdivision of one) buildings, the allows allocation of the deduction to the person primarily responsible for designing the property in lieu of the owner of such property. Such person will be treated as the taxpayer for purposes of this deduction.

45 Internal Revenue Bulletin (IRB) dated April 7, 2008, provides revised guidance. A designer may include, for example, an architect, engineer, contractor, environmental consultant, or energy services provider who creates the technical specifications for a new building or an addition to an existing building that incorporates energy-efficient efficient commercial building property. The guidance also outlines the process that architects and others would have to follow to claim the deduction.

46 The Interim Rule applies to property not subject to the basic rule. The Interim Rules for Lighting Systems define the lighting system energy-savings target to be a lighting power density that is 25-40% lower than the minimum requirements in Table (building area method) or Table (space-by- space method) (not including additional interior i lighting power allowances) of ASHRAE Standard For warehouses, the lighting power density must be 50% lower than ASHRAE Std

47 For interior lighting systems achieving a LPD reduction of 40%, then 100% of the deduction is given ($0.60/sf). If the 40% reduction is not met, the deduction is prorated as follows: Ded/sf = $0.60 X (100 (3 1/3 X (40 R))) Where R=percent of LPD reduction. The minimum allowable is a 25% LPD reduction.

48 Besides demonstrating a reduction in lighting power density beyond ASHRAE Std : All controls provisions in the Standard must be met. Bi-level switching must be installed in all occupancies except hotel and motel guest rooms, store rooms, restrooms and public lobbies. The application must meet the minimum requirements for calculated light levels as set forth in the 9 th Edition of the IESNA Lighting g Handbook. These rules do not apply to buildings meeting the requirements of the Permanent Rule.

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50 A 30% tax credit is available to businesses that purchase onsite renewable energy systems through the calendar years with no cap after Solar PV and Solar Water Heating Systems. Small wind of 100kW or less. Geothermal Heat Pumps meeting Energy Star specifications (businesses only get 10%).

51 Business installation of qualified fuel cells plants and stationary microturbines. Fuel cells ( ): At least 0.5 kw capacity. Electric-only generation efficiency > 30%. Tax credit is 30% up to $3,000 per kw of capacity. Fuel cell plant includes stack assembly and balance of plant to convert fuel into electricity by electrochemical means.

52 Microturbines ( ): Stationary plant with nameplate capacity less than 2,000 kw for business application. Electric-only efficiency not less than 26%. Tax credit is 10% up to $200 per kw of capacity. Microturbine plant includes gas turbine engine, a combustor, a recuperator or regenerator, a generator or alternator, and associated balance of plant components to convert fuel into electricity and thermal energy.

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54 State rebates, buy downs, grants, or other incentives do not decrease the amount eligible for the federal investment tax credit if the company is required to pay federal income tax on the incentive. Most other incentives represent income on which federal income taxes are paid and therefore do not decrease the basis for the federal investment tax credit. Some other incentives are not taxable and for these the tax credit basis must be reduced prior to calculating the commercial tax credit amount.

55 Tax credits can be taken on IRS forms 1120, 1120-C, 990-T, or 1040 Schedule C depending on entity claiming tax credit. Companies that pay the alternative minimum tax (AMT) may not be able to use the energy tax incentives the credits may be deferred to another tax year where they can be used (forward 20 years). Special Assessment for Solar Energy Systems Special Assessment for Solar Energy Systems Property tax exception for Illinois

56 Under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009 (Section 1603), the United States Department of the Treasury makes payments to eligible persons who place in service specified energy property and apply for such payments. Eligible property includes only property used in a trade or business or held for the production of income. By receiving payments for property under section 1603, applicants are electing to forego tax. For property placed in service in 2009 or 2010, applications must be submitted after the property has been placed in service and before October 1, 2011.

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