CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Receive the update on the Renewable Energy Program and proposed program changes for 2026
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DEPARTMENT: Community Services
SUBMITTED BY: Ben Mjolness, Sustainability Manager
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
In 2004, the City Council approved the creation of the Renewable Energy Program (REP) as a way for Electric Utility customers to monetarily support renewable energy.
Various changes to the program have occurred over the past 20 years, including an increase in purchases of Renewable Energy Certificates (RECs) and adding energy efficiency grants for commercial and residential properties to the program. A significant turning point in the program occurred in March of 2020 when the City Council and Public Utilities Advisory Board (PUAB) approved expanding the grant program to include residential energy efficiency initiatives such as window and attic insulation upgrades. These changes were made to reduce energy consumption across the city. At the same time, an increase in solar incentives was approved to encourage local generation while reducing the growing Renewable Energy Fund cash balance.
In 2021, REC purchases were formally discontinued so that funds could be utilized solely to support local efficiency and solar installation projects. Since 2021 adjustments have been made to the maximum award amount and reimbursement amounts to make the program more sustainable and adapt to various market changes as well as an increase in available federal and state grants.
The REP now has just over 3,800 participants with annual revenue of approximately $280,000. As of December 4, 2025, the fund’s cash balance was $289,543.30.
DISCUSSION:
Participation in the REP has steadily increased over the years, supported by a change made in 2024 which requires grant recipients to remain in the program for a minimum of five years after receiving a grant. This change ensures that program membership and revenue remain stable.
In 2025, the three most popular rebate types were Residential Solar, Attic Insulation, and Window Replacement. Staff and members of the Naperville Environmental and Sustainability Taskforce (NEST) have reviewed the latest state standards for energy efficiency as well as programs offered by other utilities. There have been no significant changes to any rebate type and when the REP rebates are combined with IMEA-provided rebates a wide range of opportunities to improve energy efficiency, and ultimately reduce electricity consumption, are provided to our residential and commercial customers.
Recommendations:
1. After consulting PUAB and NEST, Community Services Department staff recommends no changes to the rebate types and funding amounts in 2026. The grant amount and overall budget for each line item are shown below:
|
Rebate Type |
Current Grant Amount |
2025 Budget |
|
Residential Attic Insulation |
$1 per square foot/$2,500 maximum rebate |
$90,000 |
|
Residential Single-Pane Window Replacement |
The grant amount is $250 per window, with a $2,500 maximum award |
$50,000 |
|
Residential Solar |
Limited to 7 kW AC and will not exceed $1,750 ($250/kW AC rated at AC Inverter) |
$109,500 |
|
Commercial Solar |
Max of $15,000 per commercial project |
$30,000 |
|
City of Naperville Funded Residential EVCS |
Up to $500 is offered from the IMEA Energy Efficiency program |
$0 |
|
Residential Furnace Blower Motor Upgrade |
$100 |
$200 |
|
Air Conditioning Unit Tune-Up |
$25 per unit- once every 3 years |
$300 |
|
Total |
$280,000 |
The entire REP is administered by the Sustainability Specialist in the Community Services Department. Grants are awarded in the order they are received. Grant applications are considered complete when all form fields are completed, and the application is submitted online with all required documentation. When all budgeted funding is awarded, the program awards will close for the remainder of 2026.
2. NEST concurs with staff’s recommendation that applications and all supporting documents must be submitted within 120 days of final inspection (solar) or installation (windows and attic insulation). This requirement replaces the former policy that all aspects of the project (contract signing, permitting, installation, and inspection) take place in the calendar year for which the funding is intended. This policy change supports equitable access to the REP incentives for residents whose projects span more than the calendar year.
3. NEST recommends rolling any unspent REP funds into the upcoming year’s program budget. REP funding has been fully allocated before the end of the calendar year for the past three years. In the event funds remain unspent at the end of 2026. Staff agrees with this recommendation.
4. Following discussion with members of the PUAB, staff recommends adding an air sealing requirement for eligibility for the attic insulation incentive. Nicor currently requires air sealing for their attic insulation incentive. Pairing air sealing and attic insulation is a best practice that reduces heating and cooling costs, improves durability, increases comfort, and creates a healthier indoor environment (according to the U.S. Department of Energy).
FISCAL IMPACT:
Projected 2026 revenue and the existing cash balance in the Renewable Energy Fund are sufficient to award $280,000 in grants for 2026.