Iowa: The #1 Solar Utility in America. Iowa? Kudos to Iowa!

by John Farrell.

It may be one of the oldest cooperative utilities in the country, but in the next six months, Farmers Electric Cooperative (FEC) of southeastern Iowa will be leading the nation in this 21st century energy source. Upon completion of a new solar array, the 640-member cooperative will have over 1,500 Watts of solar per customer on their system, nearly double the #2 utility. It’s also the most reliable utility in Iowa. How can a small, member-owned utility be “America’s Most Progressive Utility“?

Find out in this interview with FEC Manager Warren McKenna, recorded via Skype, on November 18, 2013.

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Flexibility

Unlike many small cooperative or municipal utilities, Farmers Electric Cooperative only buys 30% of its energy on long-term contracts. Instead, McKenna explains, they buy power on the spot market, using local power generation and demand management to avoid price spikes. This leaves them open to buying power from local generators, especially solar.

Creativity

FEC hasn’t limited itself to just one strategy for adding solar to the grid. In fact, they don’t even have net metering, the most common policy for connecting small-scale solar projects.

Instead, they have a feed-in tariff at pays 20¢ per kilowatt-hour (kWh) for solar energy, as long as it’s 25% or less of a customer’s own use. For solar energy produced that is between 25 and 100% of a customer’s monthly usage, customers still get 12.5¢ per kWh (the retail electricity rate for residential customers). Surplus generation is purchased by the utility at 6¢ per kWh.  Participating customers still buy all their electricity from the utility

FEC also has a 25 kW community solar project, selling shares to new customers in phase 2 for just $1.63 per Watt. Current participants can buy additional panels for $2 per Watt.

Finally, the cooperative has also commissioned a new 750 kW solar array which will sell power to the utility for its first 10 years, and the revert to cooperative ownership thereafter.

Participation

Since it’s a cooperative, technically every FEC member is an owner in a local solar project. But ignoring that for the moment, about 20% of the cooperative’s members either have their own solar array, own shares in the community solar project, or participate in the Green Power Project (a $3 per month green pricing program for purchasing local renewable energy).

Replicable?

The big question is, could your local utility do what Farmers Electric is doing?  If your utility happens to be locally owned, says McKenna. Cooperatives are often very open to comments from their members, and if not, you can run for the board.  Municipal utilities are overseen by elected officials, who are always looking for examples of strategies to increase local jobs, particularly from clean energy.

It’s inspiring to see what FEC has accomplished, regardless.  Most of the greenest utilities in the U.S. are among the largest, and Farmers Electric shows that you don’t have to be a big utility to do big things with locally owned renewable energy.

This is the 12th edition of Local Energy Rules, an ILSR podcast with Senior Researcher John Farrell that shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion. Other than his immediate family, the audience is primarily researchers, grassroots organizers, and grasstops policy wonks who want vivid examples of how local renewable energy can power local economies.

It is published twice monthly, on 1st and 3rd Thursday.  Click to subscribe to the podcast: iTunes or RSS/XML

Sign up for new podcast notifications and weekly email updates from ILSR’s energy program!

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This article, The #1 Solar Utility Is In…Iowa?, is syndicated from Clean Technica and is posted here with permission.

About the Author

Renewable Energy. John Farrell.John Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His latest paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

On November 5th, Local Power Is On The Line

by John Farrell

'pick a side' campaign for local renewable power in Boulder, CO
‘pick a side’ campaign for local renewable power in Boulder, CO

In 2011, citizens of Boulder, CO, opted to explore alternatives to their monopoly, corporate electric utility that pumps coal-fired energy into town and sucks millions in energy profits out. They won at the ballot box despite being outspent more than 10-to-1.

But tomorrow they have to win again against deep corporate pockets, or lose everything they’ve fought for.

Since November 2011, the diligent citizens of Boulder have shown that switching to a locally owned utility could nearly triple renewable energy, lower greenhouse gas emissions by half, and compete on price with their current two-faced corporate overlords. They’ve studied other city-run utilities (29 others in Colorado alone) to learn how they could take control of their energy future for the better.

Xcel Energy, the incumbent corporate utility, isn’t amused.

xcel service territory.001
Map shows U.S. states which do not support local renewable power

After spending $1 million in a failed attempt to stifle energy freedom in 2011, Xcel Energy has already poured over $500,000 into Boulder to defeat this local and renewable threat to their monopoly business model.  They’ve sponsored a new ballot initiative (issue 310) that would make running a local, municipal utility nearly impossible. Under a rational-sounding name, the ballot measure would prevent the city from issuing enough debt to buy out the corporate monopoly and run its own electric utility.  Nearly all the money supporting the ballot measure comes straight from Xcel’s ratepayers, spread across eight states.

It’s a textbook example of a corporation looking to buy the election result they want, and all that’s standing in their way is a committed group of local citizens.  But unlike 2011, Boulder isn’t standing alone in the fight to be energy deciders for a cleaner energy future.

This video – headlining their crowdfunding campaign – shows what’s at stake.  It inspired over 5,700 individuals across the world to, as their t-shirt aptly suggests, “pick a side.”  (Disclosure: my donation to this campaign gave me the opportunity to offset the money Xcel took from my electric bill to undermine local power).

The campaign isn’t just about one city’s right to make its own energy choices, but about the right of every community to choose its energy future.  And it is ground zero in that fight, as illustrated by the president of the American Public Power Association in a surprisingly impassioned defense of communities to tap “the American tradition of neighbor helping neighbor to meet local needs”:

[Utilities] such as Xcel Energy generally oppose the formation of new public power utilities because, for them, it means the loss of customers and profits. New public power utilities also provide high-profile examples of what communities can do for themselves, and this may encourage other cities to form public power utilities.

“Other cities” includes Xcel’s hometown of Minneapolis, MN, where a grassroots campaign (several years younger than the one in Boulder) is pushing for the same thing: a candid assessment of whether the incumbent utility is providing the best possible energy future.

That makes tomorrow’s vote a crucial one.  Will it be another example of how a corporate monopoly buries its political and economic opponents?  Or will it be Boulder’s shot heard ’round the world of locals taking charge of their energy future?

We’ll see.

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This article, On November 5th, Local Power Is On The Line, is syndicated from Clean Technica and is posted here with permission.

About the Author

John Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His latest paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

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A Community Solar Gold Standard?

by John Farrell — Special to JBS News

.

Westmill Solar Cooperative 1-640x424
Image is provided for illustrative purposes only. Photo courtesy: Westmill Solar Cooperative

Joy Hughes was living in the San Luis Valley of Colorado, a place with a “tremendous amount of solar potential” so good that the valley’s residents were being overwhelmed by proposals for large-scale solar power plants. One had a “field of things like radar dishes” and another included a “600 foot tower.” The influx of outside companies seeking solar profit led Joy to ask, “Why not just set up solar arrays that can provide power for people in the local community and offset their electric bills?”

The Solar Gardens Institute was born, with a vision of helping community members pool their resources, produce their own energy, and keep their energy dollars local.

Listen to the Podcast (Local Energy Rules): Play in new window | Download | Embed

A Contest of Who Could Type As Fast As Possible

One of the Institute’s first initiatives was Colorado’s nascent solar gardens legislation, a national prototype for community shared renewable energy. The bill passed in 2010, and after two years in rulemaking the 9 megawatt (MW) program sold out in 30 minutes. While it was a good framework for encouraging community solar, “it became a contest of who could type as fast as possible,” said Hughes, who felt that the application process (and other aspects) weighted against some of the more authentically community-based projects.

The Colorado law had many good things, including requirements for participation by low-income participants, geographic proximity of subscribers to the solar project, and slightly higher incentives for smaller community solar projects. The last is what make these small projects possible, Joy said, and gets them closer to where people are using the electricity. The proximity also makes technical sense for small communities, because “a substation can take in about as much as it can put out.”

A Community Solar Gold Standard

Joy also identified several potential improvements to the Colorado law. For one, she’d like to see community solar projects have a choice over their renewable energy credits (RECs). Some non-profit projects would rather retire them instead of being required to give them to the utility. She’d also like to see improved selection criteria for projects (with a preference for those that are close to load, have local ownership, use local labor, or are financed with crowdfunding).

Joy is excited about the new community solar guidelines coming from the Interstate Renewable Energy Council (IREC), an open process that will help decide on a “gold standard” for community solar. There are also community solar laws being proposed in several other states, including California, Washington, Massachusetts, Nebraska, Maryland, DC, Hawaii (Minnesota’s almost-passed solar energy standard also features a provision for community solar).

Removing Barriers and Moving Ahead

Joy also discussed how to remove some of the barriers to community renewable energy at the federal level. One, remove the tax equity bottleneck by passing the SUN Act to allow individuals to get tax credit with a community solar project. Offer exemptions in securities laws to let people get credits on their bill or other methods of repayment, helping avoid financial disclosures that run to 90 pages and that “nobody can really do without a lot of attorneys.” She also wants to see more open source legal documents and other strategies that create “a level playing field for small players.”

For more on community solar, you can read our 2010 report on community solar or check out the Solar Gardens Institute, where your project can get on their community solar map or you can find assistance in financing a project and finding subscribers.

This is the 9th edition of Local Energy Rules, a new ILSR podcast that is published twice monthly, on 1st and 3rd Thursday. In this podcast series, ILSR Senior Researcher John Farrell talks with people putting together great community renewable energy projects and examining how energy policies help or hurt the development of clean, local power.

Click to subscribe to the podcast: iTunes or RSS/XML

Sign up for new podcast notifications and weekly email updates from ILSR’s  energy program!

This article, A Community Solar Gold Standard?, is syndicated from Clean Technica and is posted here with permission.

About the Author

John Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His latest paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

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Utility Agrees: (Their) Solar Should Supplant Natural Gas

by John Farrell – Special to JBS News

solar power facts

Five months ago, one of the country’s ten largest electric utilities told regulators in Minnesota that it needed three new natural gas power plants to handle peak energy demand. This week, the same company’s Colorado division announced plans to use more solar power because it is cost competitive with gas.

Maybe they need a memo to share the news: solar is cheaper than gas. A lot cheaper. Big or small.

The city of Palo Alto, CA, recently signed contracts to buy solar energy from utility-scale projects for 7¢ per kilowatt-hour. This is on the heels of solar contracts signed by big utilities in California to buy large-scale solar for 9¢ per kilowatt-hour. (For context, in most parts of the country, residential customers pay about 10¢ per kilowatt-hour of electricity).

But even small-scale solar is competitive with natural gas power for supplying energy when the grid needs it most.

Take the Minnesota example. Xcel’s April 15 filing [large pdf] with the state’s public utility commission asks for 600 megawatts of new generating capacity from “single cycle” natural gas power plants. The California Energy Commission estimates that the cost of electricity from these power plants ranges from 28 to 65¢ per kilowatt-hour. The cost of energy is high because the gas power plants are often on and running in anticipation of being needed, consuming gas to keep the turbines spinning all the while.

In comparison, electricity from a residential rooftop solar installation in Minnesota (quotes available now at $4 per Watt!) and with the 30% federal tax credit will produce electricity during high-demand peaking periods (or whenever the sun shines) for 18¢ per kWh.

You read that right: rooftop solar in Minnesota costs 36-75% less than natural gas power plants in delivering peak energy. Solar not only meets this peak need at a lower per kilowatt-hour cost, but also without the harmful emissions from running a power plant on standby (or fracking its fuel out of the ground).

What’s important to keep in mind when talking about solar and electricity prices is that solar energy production tends to align very well with the highest energy demand on a utility’s system. It doesn’t have to be cheaper than a nuclear power plant built in 1965, it just has to be cheaper than the next kilowatt-hour the utility needs at 4pm on a hot, July afternoon. For many utilities (like Xcel, one of the 10 biggest in the US), it is.  For many others, it will be soon, without subsidies.

And don’t forget, utilities buy power plants for 30, 40, or 50 years. With costs dropping by 10% per year, if solar power’s not cheaper now, it will be long before a new fossil fuel power plant is paid off.

There’s one more facet to this story. As solar gets cheap, more and more customers are looking to go solar to reduce their energy bills (and their reliance on corporate, monopoly utilities). Not only does this mean less revenue for Xcel (although independent studies show a utility’s benefit outweighs this lost revenue), it also means no shareholder return, which Xcel and other monopoly utilities only get when they build new infrastructure. Xcel’s Colorado plans suggest the utility is wising up, and that the era of customer-owned solar only lasts as long as people are willing to raise holy hell or legislatures are willing to tell them to do the right thing.

So the utility shift to solar is both bad and good. The bad news is that locally owned solar pours piles of cash into local economies, and utility-owned solar is going to suck it right back out again. The good is that even an anachronistic, monopoly utility can figure out the financial advantages to clean energy, and we need a lot of it to save the climate.

Game on.

Image Credit: Zachary Shahan / CleanTechnica (CC BY-SA license)

About the Author

John Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His latest paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

5 Barriers To and Solutions For — Community Renewable Energy

by John Farrell – Special to JBS News

Community renewable energy has significant political and economic benefits, but is often hindered by five major barriers. Read on for a summary of the five barriers, watch them in a 17-minute presentation, or check out the vividly illustrated slideshow.

Barrier one is tradition. Utilities are simply used to operating a grid in a 20th century model, where large-scale power plants are connected in a top-down, one-way grid to power consumers. Policies that have allowed for on-site solar and wind generation, for consumers to be instead producers, have nibbled at the margins of this tradition.  It’s only in the past year that utilities have realized how low-cost solar power can fundamentally up-end their entire business model. And the response has often been to entrench.

A second barrier facing community-based renewable energy is capital — upfront cash to buy a solar array or wind turbine. And the biggest cause is securities law and regulations, intended to prevent fraud like perpetrated by Bernie Madoff and others, that makes pooling capital very difficult for groups of interested local power investors. The federal or state rules often come with high compliance costs or significant limitations that hinder most efforts to raise community capital.

A third barrier is cash flow. American renewable energy policy is a byzantine array of tax incentives, rebates, and bill credits that can challenge a CPA. Figuring out how to pool all these revenue streams together to make a project with reasonable payback is a significant challenge.

A fourth barrier is legal, because of the mis-match between federal renewable energy incentives paid through the tax code and the non-taxable status of many of the logical entities for organizing community renewable energy projects. Want to use a city, county, cooperative, or non-profit structure for your community solar project?  Then you may have to forgo the 30% federal tax credit.  A level playing field for energy cooperatives is a major reason the Germans have such high levels of local ownership of their 63,000 MW renewable energy economy.

Finally, utilities themselves (as implied in #1) have acted as barriers to more community-based renewable energy.  In particular, policies like the “15% Rule” have set artificially (and arbitrarily) low limits on distributed generation under the guise of system safety.

The good news is that the barriers are being broken. 

Tradition has been tossed as utilities have had to grapple with state policies encouraging distributed generation and solar power and others have embraced pro-active measures to accommodate more local renewable energy. Crowdfunding opportunities like those offered by Mosaic are giving people an unprecedented opportunity to pool their money to go renewable. The falling cost of solar is rapidly making incentives unimportant in many areas, reducing the problems caused by half baked, tax-based federal policy.

Most importantly, utilities, regulators, and policy makers are recognizing that the 20th century model of concentrated power and capital doesn’t serve a distributed, 21st century grid.  And as that aging paradigm crumbles, community renewable energy will grow up through the cracks.

This article, 5 Barriers To And Solutions For Community Renewable Energy, is syndicated from Clean Technica and is posted here with permission.

About the Author

John Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His latest paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development. Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.

John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.