Unprecedented rate hikes: After decades of minimal electricity rate increases, a combination of grid spending and a regional electricity market meltdown have caused ComEd commercial rates to skyrocket since 2020.
Incentives for microgrids: Advanced microgrids that combine battery storage with solar can lock in lower electricity costs while ensuring reliability – and Illinois offers multiple valuable incentives to enhance this value.
Partnering with Scale: Navigating incentive programs and optimizing battery operations to maximize value requires specialized expertise – and Scale has an unmatched track record of helping businesses do just that.
Businesses in Northern Illinois, including the Chicago metro area, had enjoyed low, stable electricity prices for decades – until recently. Utility rates have surged since 2020, capped by an eye-watering 20% jump in average commercial rates in just the past year. This dramatic shift is being driven in part by a regional electricity market crisis, exacerbated by skyrocketing data center demand that also threatens to undermine grid reliability.
The good news? While Illinois is suddenly on the front lines of today’s biggest electricity challenges, state policymakers have also provided robust incentives to help unlock a cutting-edge solution: advanced microgrids that feature solar and battery storage. These systems make businesses resilient to electricity risks, enabling them to navigate this newly volatile rate environment with optimized cost savings while simultaneously providing enhanced reliability to keep operations online.
Scale has partnered with businesses in high-price markets from California to Connecticut to help them fight back against rising cost and reliability risks with microgrids, and now we’re having the same conversations with businesses in Northern Illinois. Under our fully-financed partnership model, Scale delivers our customers advanced microgrid solutions tailored to their needs for $0 down, eliminating operational risks as well as up-front costs while maximizing value from state-level incentives.
Read on to learn more about the challenges and opportunities facing these businesses – or just reach out to discuss how Scale can make your business resilient.
Market Meltdown Meets Rising Grid Spending
As shown in the chart above, electricity rates for customers of ComEd – the main utility serving Northern Illinois – were largely stable from 2005 to 2020, increasing at a rate of less than 2% per year on average. Since 2020, rates have increased by an average of 8% per year, including 20% from 2024 to 2025 alone. What’s changed?
The big headline is a crisis in the PJM electricity market, the largest in the U.S., which coordinates power sales for all or parts of 13 states across the mid-Atlantic and much of the midwest to Chicago. In recent years, a combination of retirements of aging power plants and skyrocketing demand from new loads – especially data centers – has sent capacity market prices surging to previously unthinkable highs.
(To learn more about what the PJM capacity market is, what it does, and how it works, check out this explainer on the system operator’s website.)
The PJM capacity auction for the 2025/2026 delivery year, held in 2024, was the initial earthquake, with prices increasing nearly tenfold from $29/MW-day to nearly $270/MW-day. The subsequent two auctions have delivered even bigger aftershocks, hitting the market cap of roughly $330/MW-day and locking in further price increases for years to come. This extreme volatility has turned the once-obscure market into the scene of a growing political crisis, with President Trump calling for an emergency auction to provide more capacity for data centers.
This capacity market crunch is coming on top of rate hikes driven by steadily-increasing investments in the ComEd distribution grid to replace aging power lines, harden utility equipment against severe weather, modernize the grid, and upgrade infrastructure to accommodate rising demand.
These costs show up primarily in the “delivery” portion of your bill – the fixed and demand-related charges that essentially reflect the cost of delivering electricity to your facility, in contrast to the “energy” portion of the bill that reflects the cost of the kilowatt-hours themselves. This rise in delivery charges presents a hedging challenge for operating budgets because third-party retail energy providers usually only cover energy supply charges.
For ComEd customers, delivery charges encompass fixed charges, demand charges based on your level of highest energy use every month, and coincident peak charges based on your energy use during hours of overall peak grid use every year. Increases in these charges have been the main drivers of price increases since 2020, with delivery charges overall increasing by an annual rate of 15%.
The Reliability Risk: The Cost of a "Flicker"
Grid reliability also poses growing risks for many businesses, including risks of hard-to-predict “long tail” events as well as risks of more subtle reliability issues that steadily erode profitability.
First, there are the headline-grabbing, long-duration blackouts caused by extreme weather like thunderstorms – or tornado-spawning derechos, which led to widespread ComEd outages in 2020 that added up to nearly 6 hours of lost power for the average customer. While these events may not occur every year, climate change is demonstrably increasing the frequency of severe weather-induced blackouts, posing a real and growing risk for businesses that aren’t prepared for extended periods without power.
Less noticeable for most households, but even more pernicious for many businesses, are reports of growing power quality issues on the grid. A study by Bloomberg found that data center growth is driving distortions in power supplies in many regions of the country, as the rapid swings in demand from these facilities can cause “flickers” in power frequency and voltage. The Chicago area was identified as a major hot spot, with more than a third of the study’s sensors in area households detecting higher-than-normal power quality fluctuations.
For residential customers, these issues can be an annoyance, resulting in flickering lights or requiring periodic resets of digital devices. But for a food processor, a high-tech manufacturer, or other business that rely on sophisticated machinery and automation, these “flickers” can lead to major recurring costs that can add up to massive losses. For example, one manufacturer in Northern Illinois told us they experienced power quality issues that tripped sensitive production machinery at least once a month, adding up to millions of dollars in annual costs due to lost production, equipment recalibration, and intensive cleaning cycles.
A Cutting-Edge Solution for a Complex Problem
In the face of these intertwined electricity risks, microgrids offer a cutting-edge, multi-faceted solution for Northern Illinois businesses in ComEd territory. Scale’s advanced microgrids combine multiple on-site energy resources, typically including solar, battery storage, and/or backup generators using expertly-designed controls and proprietary software.
On normal days, these systems operate alongside the utility grid, with Scale’s controls optimizing the use of energy from each distributed energy resource (DER) to minimize energy costs. In the event of a grid outage, these controls enable facilities to automatically isolate (or “island”) from the grid and rely on the microgrid to keep critical operations running.
By leveraging embedded intelligence and expertise, Scale coordinates the dispatch of these systems to ensure they deliver multiple benefits including:
Optimized Cost Savings: For most of our advanced microgrids, cost savings start with on-site solar, which generates free electricity from the sun during the day – essentially, saving on the “energy” portion of your electricity bill. Battery storage, by contrast, enables businesses to save on the increasingly-important “delivery” portion of the bill by drawing on stored energy to lower grid use during strategic hours of the day, month, and year.
Scale continually updates battery dispatch strategies to ensure optimized cost savings based on evolving rate structures, utility programs, and market opportunities.
Enhanced Reliability: Unlike traditional generators that typically take 30 seconds or more to react to an outage and ramp up, Scale’s advanced microgrids take advantage of the rapid-response capabilities of batteries to provide backup that activates in literally the blink of an eye. This protects sensitive machinery from the costly "flickers" that are becoming more common on the regional grid, and we can even design systems that provide total ride-through protection for the most sensitive electronics.
Many of our advanced microgrids also feature natural gas-fueled generators, which provide a source of unlimited duration, low-emission backup power in case of extended outages.
Speed-to-Power: As data centers increasingly consume all of the spare capacity on the regional grid, businesses looking to build new (or expand existing) commercial and industrial facilities risk facing multi-year delays to get the capacity they need. Advanced microgrids can typically be built within 2 years, and can be designed to enable rapid expansion over time – for instance, to add more solar capacity, or accommodate new loads like EV charging.
Incentives Boost Cost Savings
The economic benefits of these advanced microgrids can be augmented further through a pair of state-level incentive programs. Created by the landmark Future Energy Jobs Act of 2016 and expanded by the Climate and Equitable Jobs Act of 2021, the Distributed Generation (DG) rebate program and the Illinois Shines program offer a one-two punch of support:
The Distributed Generation (DG) rebate: Administered through utilities in the state including ComEd, the DG rebate is an upfront, one-time payment for both solar and battery hardware. The rebate is worth $250 per kilowatt of nameplate capacity for solar installations up to 5 megawatts in size and $250 per kilowatt-hour for batteries – enough to significantly reduce the costs of these key advanced microgrid components. Eligibility for the program requires a smart inverter configured to help support the ComEd grid when needed.
Illinois Shines: Initially known as the Adjustable Block Program, the (more evocatively-named) Illinois Shines program provides payments to developers of customer-sited solar based on the value of the Renewable Energy Credits (RECs) a project is expected to produce. Projects are eligible to receive 15% of their expected lifetime REC value up front and the remaining value over the first six years of operations. Eligibility for this incentive requires the payment of an application fee as well as posting of collateral based on the lifetime value of the RECs.
Under Scale’s partnership model, Scale manages applications and administration of these incentives, pays required fees, receives the funds, and uses them to proportionately lower the monthly fees charged by Scale’s Microgrid Service Agreement (MSA). To date, we’ve secured nearly $50 million in state-level incentives to build projects for customers in New York, Connecticut, and California, all of which has flowed through to amplify their bottom-line economic benefits while eliminating the costs and complications associated with these programs.
Scale similarly manages the increasing complexity surrounding the federal Investment Tax Credit, which is still available for battery projects albeit with new sourcing restrictions. If this tax credit can be secured, its value will also be applied to reduce the monthly MSA price and further increase bottom-line savings generated by the project.
Why Work with Scale?
Advanced microgrids are incredibly powerful platforms for energy resilience, enabling companies to navigate the grid challenges of today as well as the emerging risks of tomorrow. However, as you might guess from reading all of the above, the optimal design, operation, and financing of these systems requires a high level of expertise and experience.
Working with Scale means working with the leading advanced microgrid company in the country, with a decade-long track record of working with these technologies and delivering results for customers ranging from steel manufacturing facilities to grocery stores to universities and more. And, thanks to the institutional capital backing of our equity partner EQT Group, along with over $1 billion in project financing to date, we can offer long-term value and financing certainty that’s unmatched in the industry.
So, take a look at your ComEd bills over the past year or two, consider the costs of the reliability risks you face, and ask yourself what’s coming next. If you want to lock in a more resilient energy future, reach out to our team today to start a conversation about what an advanced microgrid – and these lucrative Illinois incentives – could mean for your business.
