Illinois Green Policy Update: May 2026

Capacity and Clean Energy 

For those in the buildings business, there is a lot of talk about data centers, their energy use, costs, and environmental impact. Data centers especially create a major challenge for both the energy market and capacity market, two separate but connected systems that determine where everyone gets their power and how much they pay for it.  

In the energy market, a utility customer uses energy and pays the company who generated it. The impact of data centers here is simple — they consume a lot of energy, driving up the price. 

Here’s where it gets more complicated. Grid regulators don’t just have to figure out how to meet demand one day at a time — they have to project how much energy will be used in the future as new projects are connected to the grid and ensure that enough generation can be produced at all times.  

This is where the capacity market comes in. Grid regulators pay energy providers to cover this demand, whether or not it ends up being needed. This is one of the biggest drivers of rising energy costs. Hyperscale data centers create major challenges for the capacity market. This is due to the fact that, regardless of whether a proposal ever gets built, these projects force grid providers to plan and pay for massive amounts of energy in the capacity market, a cost that gets passed to businesses and consumers.  

The POWER Act is intended to address these challenges. The most significant measures in this proposed new law include: 

Interconnection Tariffs 

Hyperscale data centers (>50 MW) would be required to pay a new “large load tariff” designed to ensure ratepayers aren’t on the hook for covering a data center proposal’s capacity costs. 

“Bring Your Own New Clean Capacity and Energy” (BYONCCE) Supply Plans  

In order to be permitted and connected to the grid, data centers would be required to develop supply plans for their energy and capacity needs. These plans would require local investment in clean energy, storage systems, and transmission infrastructure. 

Fast Tracking 

The POWER Act also creates an incentive to heavily invest in clean energy by allowing data centers that secure at least an 80% clean energy and capacity supply and at least 25% clean back-up resources to jump the line for grid connection in front of their competitors 

Code Requirements 

It also requires hyperscale data centers to comply with the most stringent energy code requirements as laid out in either the most recent IECC, ASHRAE 90.4 Sections 6 and 8, or any Illinois specific data center requirements. 

Affordability Fund 

Data centers would be required to pay anywhere from $2 million to $12 million per year, proportional to their size, into a new affordability fund to support energy bill assistanceprograms and energy efficiency projects. This fund would dole out support to the areas in the immediate vicinity of data centers in order to lower the impact on the local community. 

Learn more about data centers, their impact on Illinois, and this legislation
Energy demand in ComEd territory could double by 2040, in part driven by data centers | Capitol News Illinois

Could a New Illinois Bill Be a Blueprint for Curbing Data Centers’ Climate Impacts? | Inside Climate News 

Tell your legislators that you support the POWER ACT

Take action here!

Advocacy in Action: How Building Professionals Are Shaping Illinois Policy

Location: Gensler Office, 11 E Madison St, Suite 300, Chicago, IL 60602

Join Illinois Green Alliance for a panel discussion and happy hour exploring how building industry professionals can shape climate policy, advance energy equity, and drive meaningful change across Illinois.

Policy decisions shape the future of our buildings and communities, but meaningful action is strongest when informed by the professionals working on the ground every day. This event will bring together a diverse panel of leaders working at the intersection of policy, business, and the built environment. Panelists will leverage their unique knowledge to create pathways for more resilient and equitable communities. Attendees will gain insight into how technical expertise from architects, engineers, contractors, consultants, and other building professionals can strengthen public policy and accelerate climate action.

Unfortunately, efforts to legalize plug-in solar systems have come to a halt due to labor and safety concerns. The proposal would've allowed permitted small-scale, behind-the-meter systems that can be plugged directly into a standard power outlet. These systems have become increasingly popular because of their size, ease of installation, and ability to bypass the connection approval process making energy accessible to many more people, including renters and condo dwellers. 

Despite similar legislation being full approved in Colorado, Utah, and Maine and about to be signed into law in 3 others, some organizations raised concerns and proposed limiting these systems to under 391 watts or holding off approval until after the National Electrical Code is updated in late 2028. In light of this opposition, the bill's sponsors have decided to wait until a later legislative session to move forward.

Read more here:

Balcony solar bill dies in Illinois after union voices opposition | Canary Media

State legislators are also continuing to discuss Governor Pritzker’s BUILD Plan, a package of bills that aims to address the housing shortage across the state by loosen zoning restrictions, improving approval processes, and more. 

Read more here:

Illinois BUILD Plan | YIMBY Action. 

Lawmakers have also advanced two bills to turn down the lights. SB 3037 mandates that all lighting purchased with state funds, installed on state land, or in cities that have adopted the Stretch Energy Code comply with standards that reduce light pollution while HB 5474 would require new light fixtures to under 2700 Kelvin, meaning more warm light and less cool light.

Read more here:

Illinois Advances Strict Outdoor Lighting Standards | Inside Lighting

In 2023, Oak Park became the first city in the Midwest to require all-electric new buildings, but it soon faced legal challenges after Berkeley, CA’s similar ordinance was struck down by a federal judge.  

Since then, six other cases dealing with bans on gas hookups have concluded and electrification standards have been upheld in all six. 

“There is a clear consensus among the courts that have ruled on the issue that the 9th Circuit’s decision in [California Restaurant Association] v. Berkeley was wrong” says Daniel Carpenter-Gold of the Public Health Law Center. 

Read more here:

Local policies to get buildings off gas keep winning in court | Canary Media

In his new book, Cities in Action, associate professor of social innovation Christof Brandtner examined what catalyzes some cities to take action while others lag behind, using LEED as an example.  

Even though wealth and government capacity helps certain cities take action, civic action was incredibly important for expanding green construction and helping cities punch above their weight in terms of advancing energy efficiency. 

To make this point, Brandtner gives a shout out Illinois Green Alliance while comparing the uptake of green buildings in Chicago and Cleveland, citing our work and the efforts of other nonprofit organizations in helping Chicago build twice as many green buildings per capita than Cleveland.  

“It was the interplay among the public, nonprofit, and corporate spheres that was really responsible for the successful uptake of green construction practices in cities,” says Brandtner. 

Why Some Cities Go Green Faster than Others | Next City 

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