About Illinois

Report published: April 30, 2017

As the result of extensive research and more than 60 interviews with stakeholders and experts in Illinois, the American Jobs Project has identified utility-scale batteries as showing particular promise for economic development in the state.

Illinois is a leader in energy storage research, and is well-positioned to capitalize on its unique innovation ecosystem, advantageous location, and climate for manufacturing. There is growing demand for utility-scale batteries in the state, both for balancing regions and for creating a more secure, reliable grid. Opportunities to leverage this momentum to further serve growing regional, national, and global markets offer real benefits for the state economy and Illinois residents.

However, there are several barriers hindering Illinois’ battery industry and preventing it from reaching its full potential. These barriers to growth range from high and unclear interconnection costs to a lack of alignment of workforce development programs with industry needs. Illinois must address these roadblocks in order to become a competitive hub for grid-scale, advanced energy storage.

To take full advantage of these opportunities, state leaders can pursue strategies to create a strong foundation for industry growth and help Illinois businesses grow, innovate, and outcompete regional, national, and global competitors. With forward-thinking policies, Illinois’ utility-scale battery industry can support over 3,150 direct, indirect, and induced jobs annually through 2030.

Summary of Policy Recommendations

The analysis presented in this report culminates in recommendations for Illinois’ leaders based on best practices in the United States and abroad. Each recommendation identifies opportunities for removing barriers and growing the utility-scale battery sector. While the recommendations are intended to be complementary and would be more powerful if adopted as a package, each can also be viewed as a stand-alone option.

Local marketCreate a Local Market

Study Resources that Support Grid Resiliency and Cost Effectiveness: Conduct a grid-wide feasibility study for energy storage technologies. By comprehensively analyzing the costs and benefits of energy storage, Illinois could strategically determine where increased deployment of storage technologies may be most cost-effective.

Promote Proper Valuation and Compensation for Energy Storage Benefits: Allow utilities to recoup costs and be compensated for the true value of procured energy by assigning monetary values to the full range of services provided by energy storage, including peak demand reduction and improved reliability.

Improve the Battery Interconnection Process: Streamline Illinois’ interconnection rules to make the interconnection process more predictable and transparent. Reducing costs and uncertainty would make Illinois a more attractive location for private sector energy developers to do business.

Expand Utilities’ Performance-Based Objectives: Incorporate a wider range of outcome-based utility performance metrics to allow Illinois to more comprehensively manage utility rates to achieve specific energy goals. As several major utilities already track additional metrics above and beyond what is required by the Energy Infrastructure Modernization Act, utilities are primed to expand metrics that achieve a reliable, secure grid through technologies such as battery storage.

Explore Novel Funding Mechanisms for Battery Storage Projects: Reduce risk and reduce barriers to capital-intensive energy storage investments by employing novel financing mechanisms, such as allowing utilities to lease demonstration projects or adopting a technology-as-a-service model.

Value ChainValue Chain

Create an Energy Storage Working Group: Create organized leadership by bringing stakeholders together in an energy storage working group. This could facilitate a better understanding of the costs, benefits, and policy barriers to energy storage; foster industry relationships; and identify growth opportunities in the state.

Expand Illinois’ Utility-Scale Battery Industry Through Foreign Direct Investment: Attract investment from global companies to address supply chain gaps and expand employment opportunities for Illinoisans. Foreign direct investment missions could be a natural extension from the activities of existing state and regional economic development organizations. 

Create an Anchor Company Tax Credit: Support the development of a robust in-state supply chain by offering a tax credit to companies that successfully recruit other job-creating, battery-related businesses and suppliers to Illinois.

Grow Regional Cluster-Based Investment through Multi-Asset Renewal Funds: Overcome traditional investment barriers and reduce risk by establishing a multi-asset renewal fund (MARF) to support cluster-based value chain investment. The state could design a MARF that balances investment risk profiles within a cluster portfolio in order to facilitate investment in the entire advanced energy cluster.

Workforce DevelopmentWorkforce Development

Expand Formal Degree Programs to Include Battery Technology: Incorporate industry-specific technical training in degree programs to make graduates more attractive to in-state employers in the advanced energy sector.  

Align Community College Efforts and Connect to Private Sector Needs: Increase system-wide coordination and collaborate with industry players to more effectively meet training needs in the advanced energy sector. It is critical that community college programs align with industry needs because community colleges provide invaluable workforce training and certification programs for students entering technical industries.

Coordinate and Expand Stackable Credentials to Upgrade Worker Skillsets: Promote stackable credential programs to reduce barriers to mid-level education and strengthen workforce skillsets. Although more than half of the jobs in Illinois require a level of training in-between a high school diploma and a bachelor’s degree, only 42 percent of the Illinois workforce is trained to this middle-skill level. 

Create One Central Body to Oversee Public Education: Unify public education systems under one umbrella entity to facilitate connections and improve coordination among the systems, ultimately helping students transition and better meet the needs of industry employers. At present, the K–12 education system, the community college system, and the state university system all operate in independent silos under the direction of unique governing boards.

Access to CapitalAccess to Capital

Seek Philanthropic Dollars Via a Foundation Liaison: Leverage philanthropic resources to better support underfunded workforce and infrastructure development programs without adding to the state’s budget deficit, especially during budget and economic crises, which make it difficult for the state to commit public funds to noncritical investments.

Increase Capital for Fund of Funds by Selling Insurance Premium Tax Credits: Sell insurance premium tax credits to ensure the state’s fund of funds, which provides critical financial investments to venture funds throughout the state, maintains adequate support.

Innovation EcosystemInnovation Ecosystem

Invest in and Retain Illinois STEM Talent: Consider establishing a tax credit to incentivize Illinois-educated professionals to maintain their residency after graduation, especially as the state budget crisis and booming out-of-state technology markets have made it difficult for Illinois colleges, universities, and companies to recruit and retain talented scientists and engineers.