On January 8th, 2026, Illinois Governor JB Pritzker signed Senate Bill 25 – known as the Clean and Reliable Grid Affordability Act (CRGA) – to combat rising electricity costs in Illinois, which saw a 15% increase in 2025. The bill encourages renewable energy deployment, creates powerful incentives for energy storage, and includes a host of measures aimed at improving the state’s energy resiliency and lowering costs for ratepayers, with the Illinois Power Agency (IPA) estimating total customer savings of more than $13bn over the next 20 years.

The CRGA is a monumental bill in both size (over 1,000 pages!) and scope, so here we break down the most impactful updates for the clean energy community. 

Program Highlights

The bill represents a significant shift in how Illinois plans, procures, and operates clean energy resources. For developers, the bill is primarily about scaling energy storage, integrating those assets directly into grid operations, and conditioning access to state incentives on compliance with new participation and labor requirements.

First, the bill directs utilities to facilitate the development of up to 3 gigawatts of energy storage by 2030, supported by mandatory procurement targets, the creation of virtual power plant programs, and expanded time-of-use rebate structures for residential and commercial customers. Together, these measures are intended to reduce peak demand costs and improve grid reliability as renewable penetration increases.

For developers, the most consequential provisions are the new battery storage incentive programs and the operational obligations that accompany them. Storage systems seeking state incentives must be capable of supplying energy to the grid and must operate subject to utility- or Illinois Commerce Commission (ICC)-directed dispatch schedules, effectively treating storage assets as dispatchable grid resources rather than purely customer-tied infrastructure. Participation in VPP programs is a core eligibility condition for many of the bill’s incentives.

The CRGA also introduces new transparency requirements for utilities, including standardized disclosures related to interconnection costs, application timelines, and delays. These changes are designed to give developers clearer cost visibility and reduce uncertainty in project development. In parallel, the bill expands long-term planning obligations for municipal utilities and electric cooperatives through new integrated resource planning requirements, increasing visibility around future resource needs.

Finally, the bill formalizes labor standards as a gating requirement for participating in Illinois clean energy incentive programs. Projects seeking benefits under programs such as Illinois Shines, Illinois Solar for All, and the new storage incentives must comply with project labor agreement requirements.

Through this comprehensive bill, Illinois aligns its goal of improving grid reliability and affordability with a clear set of incentives for clean energy developers. By pairing expanded storage deployment with operational integration, increased transparency, and defined labor standards, the CRGA encourages continued investment in renewable energy projects while positioning the state to better manage peak demand and long-term electricity costs.

Storage in the Spotlight

The predominant focus of the CRGA is to increase battery storage and capacity within the state, backed by direct financial incentives and mandatory procurement targets, as part of a larger effort to better match energy demand with supply and reduce system-wide costs.

First, SB25 lays out utility-scale energy storage procurement plans for 1,038 megawatts (MW) of either standalone or paired capacity in 2026, with a goal of 3,000 MW of cumulative energy storage commercially operating by the end of 2030.¹ Utilities’ allocation of this capacity will depend on how many residents they serve. For utility-scale storage developers, this creates a powerful pathway for contracted offtake through Illinois Power Agency-administered procurement cycles.

To further align developer incentives with this statewide goal, the CRGA establishes rebate programs for distributed generation-scale energy storage systems, conditioned on participation in specified grid services like the new Virtual Power Plant Program (VPP). The rebate proposed will provide energy storage systems, paired or standalone, with a dollar rebate amount per kilowatt hour (kWh) of the nameplate capacity of only the storage element.² 

Owners and operators of distributed generation storage systems active before December 31st, 2029 will be eligible for a $300/kWh rebate.³ Beginning January 1st, 2030, the rebate steps down to a base $250/kWh. Projects electing the incentive through the VPP program must have a smart inverter and will also have to participate for a minimum of 5 years– making incentive eligibility dependent on long-term grid participation.⁴

Virtual Power Plant Program

To improve additional energy resiliency within the state, the CRGA mandates that the ICC establish a virtual powerplant program (VPP), which will provide additional flexibility during high demand events.

A VPP is a coordinated network of distributed energy resources – such as solar panels, battery storage, and wind turbines – that can provide energy when the grid has excess demand.⁵ VPPs rely on a centralized control framework to optimize dispatch during peak consumption periods, allowing aggregated resources to function similarly to a conventional generation asset. Through this system, Illinois will provide their residents and businesses with a more energy resilient grid while lowering consumer electricity costs.

What resources are eligible?

Eligible resources depend on the device category, but at a high level, the program is focused on controllable, storage-enabled resources capable of responding to dispatch signals. Controllable eligible devices include behind-the-meter storage, smart thermostats, EV batteries, and distributed renewable energy devices paired with one or more storage systems.⁶ 

How do projects enroll?

Developers or residents may enroll through either registering with an aggregator or directly with the utility. A direct participant receives VPP payments directly from the utility, allowing the utility to adjust the participant’s device through dispatch signals.⁷ Enrollment through an aggregator means connecting devices to a non-utility third party, an entity that controls 100kW or more of eligible devices, that runs dispatch signals in response to event signals from utilities.⁸ 

How are participants compensated?

The ICC establishes a base compensation rate of $10 per kW of average dispatch during identified hours, distributed at the end of the program year. For distributed generation interconnected to a utility’s distribution system and not behind-the-meter of a retail customer, compensation will be determined based on the point of the interconnection.⁹ By June 1st, 2026, each public utility will release their payment amounts for VPPs, and the ICC will have a month to approve them.

When will the VPP schedule operate?

As VPPs are meant to help during peak energy demand, they will operate for the months of June through September with scheduled events occurring during weekday afternoons.¹⁰ Depending on the device, there are different peak hours when the VPP program will take control of the system. Behind-the-meter storage will have a window of 4pm to 6pm, while distribution-connected utility systems will have a dispatch window from 4pm to 7pm. Notably, stand-alone storage will have voluntary events. The ICC reserves the right to modify the schedule depending on consumption patterns and energy needs, but will limit events to 80 days, behind-the-meter periods to 2 hours, and distribution-connected periods to 3 hours.¹¹

Though the CRGA lays out the framework for the VPP program, the mechanics of the program, and what responsibilities will fall onto whom, are still being sorted out in real time. For parties interested in participating in the program, monitor your utility’s website in the coming months as they announce their implementation.

Utility and Interconnection Adjustments

The CRGA introduces new guidelines for utilities to both improve interconnection queue transparency and streamline the interconnection process.

The bill establishes an Interconnection Working Group (IWC), tasked with standardizing and publishing interconnection and metering costs, and improving the “transparency, accuracy, and use of the distribution interconnection queue and hosting capacity maps.”¹² Utilities will be required to provide non-binding operational cost breakdowns, giving renewable energy developers clearer and more predictable cost expectations.

Utilities will also have new transparency obligations, such as an accessible interconnection queue posted on the respective utility’s website, disclosures on delays, and caps on certain interconnection charges. Lastly, utilities now must publish core interconnection documents to help developers benchmark cost assumptions and streamline the application process.

The CRGA requires the IWC to issue reports at least annually.¹³ Implementation of the utility requirements will be phased, and developers can expect to see the first round of transparency deliverables by the end of 2026.

In addition, the bill includes targeted provisions to streamline approval of qualifying high-voltage direct-current transmission projects. This should positively impact renewable energy projects over the long term, relieving grid congestion and potentially lowering interconnection costs.

The bill also imposes new mandatory integrated resource planning requirements on municipal power agencies and utilities, as well as electric cooperatives above 7,000 customers, requiring them to publish public IRPs every 5 years beginning January 1, 2027.¹⁴ This public disclosure of procurement plans will help developers better understand where new projects are most needed.

Nuclear Moratorium No More

The CRGA contains a drastic change for energy sources in IL: the bill has lifted the almost 40 year long nuclear energy moratorium for large-scale nuclear power reactors within the state. On January 1st, 2026, nuclear power reactors may begin construction, pending proper documentation and permitting, with no size restrictions.¹⁵ This provision provides exciting changes for supplying diversified energy sources for citizens of Illinois, while prioritizing the safety of those communities.

The addition of this measure was a notable shift from Governor Pritzker’s prior stance on allowing large scale nuclear reactors, which he vetoed in 2023 despite passing measures to allow small-scale nuclear power reactors to be built in the state later that year. At the CRGA’s press release, Pritzker noted that this shift occurred because he and lawmakers are “pursuing every available option to produce affordable, efficient, clean, and abundant energy,” reiterating the focus of the current administration’s stance on clean, low cost energy options.

Geothermal Energy Program

The CRGA introduces the Geothermal Homes and Business Program to promote the implementation of geothermal heating and cooling systems by providing financial incentives linked to the system’s generation of renewable energy credits (RECs).¹⁶ The program will begin on June 1st, 2028, and will run for seven years, with an annual allocation of $10mm to fund the RECs. Similar to the Illinois Shines program, the IPA will set annual block size and associated pricing depending on the utility territory, project type, and customer.¹⁷

In line with the Geothermal Energy Program, the CRGA contains direction for the ICC and Illinois Finance Authority to jointly launch the Thermal Energy Network Pilot Program, a system of providing grants to residential and commercial heating and cooling systems.¹⁸ The CRGA directs the Illinois Finance Authority to create the Thermal Energy Network Revolving Loan and Financial Assistance Program, the funding vehicle for the pilot program.¹⁹ The program will ideally leverage federal funds; however, should those funds be insufficient, the ICC may authorize up to $20mm in funding for the program.²⁰ The Illinois Finance Authority will release further information in the coming months on the details and funding levels of the program.

Labor Sources

The CRGA includes measures to encourage the use of local union labor for the construction of renewable energy projects. The bill accomplishes this by barring projects from receiving RECs if the project doesn’t put a project labor agreement (PLA) in place prior to construction. This rule becomes effective on June 1st, 2026 and applies to utility scale wind, solar, brownfield solar, repowered wind, and retooled hydropower projects. The PLA requirement also applies to battery storage projects claiming the new energy storage credits. Lastly, for community solar projects larger than 3 megawatts of nameplate capacity, a PLA prior to construction is required for REC eligibility. 

The process of setting up a PLA requires negotiating with the general contractor of the project and ensuring that certain criteria are set and signed before construction begins.²¹ This criteria includes establishing a minimum hourly wage, agreeing on benefits and compensation, setting apprenticeship goals for minority and female workers, and establishing provisions to ensure that the general contractor will not strike during the project’s construction.²² Once signed by both parties, the developer files the PLA with the IPA director.

Bill Impact on IL Shines

Illinois Shines, the state’s REC incentive program for solar, has been hugely impactful – over $5bn worth of REC contracts have been funded in the 10 years since its inception. The CRGA, though introducing new measures to improve the resiliency of the state and shield consumers from rising electricity costs, has doubled down on both Illinois Shines and Illinois Solar for All. These programs should not drastically change despite the release of this bill; however, having a signed PLA (noted above in Labor Sources) will also apply to eligibility for Illinois Shines and Illinois Solar for All projects. 

Additionally, developers of both traditional and community-driven community solar projects paired with battery storage are eligible for the battery storage rebate in addition to Illinois Shines incentives, if their interconnection agreement is dated after January 8th, 2026, they have a smart inverter, and they commit to the VPP program for 5 years, along with satisfying the relevant Illinois Shines criteria.²³

See our article for more information on how the Illinois Shines program works.

Takeaways

In passing the Clean and Reliable Grid Affordability Act, Illinois lawmakers have signaled a monumental shift in introducing not only new sources of energy and storage, but also methods to harness and deploy this supply, helping to lower electricity costs for Illinois residents and improving the state’s energy stability. For developers, the biggest impact will be the wealth of incentives for building out energy storage, as well as smoothing out existing pain points of interconnecting projects to the power grid.

Developers should expect rapid implementation of these policies in the near term as the ICC, IPA, and utilities work to roll out the changes. Being aware of key dates and eligibility requirements for the programs authorized by the bill will help developers fully take advantage of the new incentives. 

Notably, eligibility for federal tax credits are not impacted by receiving the battery storage rebate. We expect this new incentive, alongside the continued availability of the investment tax credit for storage, to meaningfully accelerate distributed generation-scale battery deployment in the state. For developers considering claiming Federal Investment Tax Credits, please check out our resources and feel free to reach out to the Concentro team for support throughout the tax credit monetization process.

References:

1. CRGA, pp. 402-407, SB25 bill pdf.
2. CRGA, pp. 724-725, SB25 bill pdf.
3. CRGA, p. 727, SB25 bill pdf.
4. CRGA, p. 728-732, SB25 bill pdf.
5. CRGA, p. 753, SB25 bill pdf.
6. CRGA, p. 751, SB25 bill pdf.
7. CRGA, p. 759, SB25 bill pdf.
8. CRGA, p. 750-761, SB25 bill pdf.
9. CRGA, p. 734, SB25 bill pdf.
10. CRGA, pp. 731-732, SB25 bill pdf.
11. CRGA, p. 732, SB25 bill pdf.
12. CRGA, pp. 700-701, SB25 bill pdf.
13. CRGA, pp. 889-892, SB25 bill pdf.
14. CRGA, p. 5, SB25 bill pdf.
15. CRGA, p. 38, SB25 bill pdf.
16. CRGA, p. 203, SB25 bill pdf.
17. CRGA, pp. 294-296, SB25 bill pdf.
18. CRGA, pp. 644-645, SB25 bill pdf.
19. CRGA, pp. 124-125, SB25 bill pdf.
20. CRGA, p. 644, SB25 bill pdf.
21. CRGA, p. 139, SB25 bill pdf.
22. CRGA, pp. 139-140, SB25 bill pdf.
23. CRGA, pp. 728-729, SB25 bill pdf.

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