Small Distributed Generation
The Small Distributed Generation category includes distributed generation projects up to and including 25 kW in size. The Small Distributed Generation category will comprise at least 20% of the Illinois Shines capacity generally.
Each project that is constructed in this category will be subject to prevailing wage requirements included in the Prevailing Wage Act except the following types of projects:
- Residential DG projects
- DG Projects that serve a house of worship and do not exceed 100 kW AC
Program Year 2026-27 Updates:
The passage of the Clean and Reliable Grid Affordability Act (CRGA) included changes to the REC payment structure for Small DG projects effective June 1, 2026.
| Small DG under 2019, 2021, 2022, 2024 REC Contracts | Small DG under 2026 REC Contract |
|---|---|
| 100% payment at Energization | 50% payment issued at Energization, with remainder paid ratably over the subsequent 6 years |
Applications ICC Approved on or after June 1, 2026, will receive the 2026 REC contract with the new payment schedule.
Approved Vendors should ensure the promised incentive passthrough payment aligns with their existing executed contracts regardless of the assigned payment schedule. AVs should also consider updating their standard contract language for future customers to clarify how they will pass through any promised incentive payments to customers
Please note: The updated DG Purchase Disclosure Forms will have a new required field where AVs who promise pass-through incentive payments to their customers must explain how they will pass through the promised payment to their customers (e.g., 100% lump sum payment X days after Energization; 50% lump sum X days after Energization, then the rest quarterly over Y years; other).
To alleviate the known challenge of the lost availability of the federal Investment Tax Credit (ITC), a $20/REC adder for customer-owned Small DG projects will be available during the 2026-27 Program Year.
See the Small and Emerging Business Designation hub for information on Approved Vendor Eligibility and benefits for project submission.
For assistance in this project category, contact Kaitlin Hogan at [email protected] or the Program Administrator team at [email protected].
Category-Specific Resources
FAQs
Small DG projects ICC Approved for a REC Contract on or after June 1, 2026, will receive a 50% upfront payment of the REC incentive at Energization and the remainder will be paid ratably over the subsequent 6 years.
The $20/REC adder will be available during the 2026-27 Program Year for customer-owned Small DG projects that will not receive the ITC or residential energy tax credit. AVs will be able to request the REC adder on Small DG customer-owned applications submitted, batched and paid on or after June 1, 2026. View more details about the adder on Page 27 of 2026-27 Program Guidebook.
Category-Specific Updates
This blog includes key items specific to this Illinois Shines project category, but AVs and Designees are still expected to read all Program announcements in full, which contain other critical Program items and updates.