Greg Morrison said he’s long been interested in renewable energy. But when the Crawfordsville real estate broker researched residential wind and solar options over the past 10-15 years, he found little in both price and output that would make a true “alternative.”
“It would run a lightbulb in a garage,” he offered of each discouraging review.
But last year, the 64-year-old member of Tipmont REMC was intrigued to learn about the solar project Tipmont was building on the south lawn of its Linden office: the first “community solar” array in Indiana.
As photovoltaics (PV) have become more efficient and much lower in cost over the past half dozen years, solar projects have flourished. Community solar has fast emerged as a convenient solution for consumers to receive clean, renewable energy without themselves investing in hardware and worrying about maintenance or even installation on their property.
A community solar project, sometimes called “solar garden” or “solar farm,” begins with a utility or other entity grouping a large number of solar PV panels together as a single unit called an array. Using economies of scale, the per panel cost of a community array is much cheaper than it is for an individual homeowner who installs just several. Tipmont’s array, for example, includes 240 panels.
Consumers who choose to participate purchase shares of the array’s total output. They then receive a credit each month based on the amount of electricity produced that billing cycle, divided by the 240 shares.
“I knew going in that I was getting some credit back, but I wasn’t looking at it for a ‘return on investment,’” said Morrison of signing on as a shareholder last October. “If it just paid for itself, then I felt it was a good investment. I did it to be community minded.
“It’s a move forward into what will possibly be the future of energy,” Morrison said.
Alternatives … you could say that is what Tipmont and many other electric cooperatives all around Indiana and the nation are all about these days: alternative energy sources and alternative services to meet the diverse interests of all consumer-members.
“We wanted to give our members a choice in the kind of power they support,” said Jason Monroe, Tipmont REMC’s energy management supervisor who oversaw the development and maintains the community solar project. “A lot of people want green energy. Being able to generate that for our membership through a community solar project just makes sense.”
“It’s no different than standing in front of the cereal aisle,” said Ron Holcomb, CEO at Tipmont. “Somebody’s going to want Cheerios, and somebody else wants Frosted Flakes. We have to make sure we offer a range of services that meets everyone’s specific needs.”
Home solar installations have been around for decades, but the price of the PV technology used to turn the sun’s rays into electricity made them prohibitive except for folks with the ways and means. The rapidly falling cost of PVs — down nearly 70 percent since 2010 — along with tax credits have the solar industry booming and competing with fossil fuels in price.
Tipmont invested just over $3 a watt for its 98.4 kilowatt array. Several years ago, that would have been $10.
More solar electricity generating capacity was installed in the U.S. during the last two years than in the previous 30, the Solar Electric Industries Association (SEIA) said in a 2014 year-in-review report. In addition, solar accounted for 32 percent of the nation’s new generating capacity last year. Only natural gas constituted a greater share of new generation.
The SEIA said the nation now has 20 gigawatts of installed solar capacity — enough to power 4 million homes and reduce carbon dioxide emissions by 20 million metric tons a year.
The U.S. PV market is expected to grow another 31 percent this year, the report noted.
Despite the growth and lower costs, many folks still cannot afford an individual solar installation. And the reality is that PV installations simply are not practical for three out of four residential consumers for various other reasons.
Community solar, in line with the cooperative notion of folks voluntarily pooling resources to do together what they can’t do alone, brings the sun’s rays into reach for all — without any one individual getting burned.
Across the country, often in places once written off as unsuitable for solar development, consumer-owned electric co-ops are finding ways to bring the benefits of solar to their members.
“This is a low-cost way for our members to participate in a solar energy program without having to install their own solar panels,” Holcomb said. “It’s especially appealing to those who might not be able to install solar panels on their property — because they lease their home or business, own property with shade trees that would limit capturing the sun’s power, or have a roof that can’t support solar energy. Now, they, too, have a way to be resource-conscious.”
The National Renewables Cooperative Organization, which is based in central Indiana and serves co-ops nationwide in developing alternative energy options, recently marked the first anniversary of the Solar Cooperative Community Projects. The program partners with finance and insurance cooperatives to offer electric co-ops access to cost-effective and locally generated solar resources.
More than 20 cooperatives in eight states, including Indiana, have either completed or are actively developing projects through the program.
Electric co-ops are also working through the National Rural Electric Cooperative Association (NRECA) to reduce barriers in implementing utility-scale solar PV systems.
While Tipmont REMC was the ground breaker in Indiana, here is a brief survey of the other co-ops investing in or investigating solar projects:
• Bartholomew County REMC in Columbus is planning an informational seminar on solar in May that is open to the general public.
• Hendricks Power Cooperative in Danville has installed 175 solar panels as a pilot program.
• Kankakee Valley REMC in Wanatah is gathering information and developing a financial plan for a community solar project.
“We are unsure where the future is heading, so we want to use community solar as a means to gather knowledge and compare technologies,” said Dennis Weiss, CEO at Kankakee Valley REMC. “We feel that the current price of solar energy is very competitive with the unknown future energy prices. It is possible that community solar could be a hedge on future energy prices.”
• Miami-Cass REMC in Peru offered a community project to its members in September. This would be built at its office to a size that would accommodate member participation. The co-op is still gathering information from residential and commercial consumers who expressed interest.
“We believe our co-op needs to be a good steward of our members’ interests,” noted CEO Rob Schwartz. “If our membership feels that solar power is a valued asset to our company, we have an obligation to explore a business plan to accommodate them.”
• NineStar Connect in Greenfield is in the planning stages of community solar. Members were introduced to the idea at their annual meeting last April and 160 people attended a solar workshop.
• Paulding Putnam Electric Cooperative in Paulding, Ohio, which serves Hoosiers in Allen and Adams counties, has a renewable energy demonstration at its office.
A host of other co-ops are also becoming involved in solar projects. Hoosier Energy REC, the cooperative power supplier to co-ops in the southern half of the state, has been working with a number of its member distribution systems on a solar project across a number of sites. It is planning to announce details later this month.
With these new exciting developments, though, come challenges and detractors.
A Washington Post article in March, for instance, shaded the rise of utility solar farms as some kind of growing turf war — a way traditional utilities were attempting to thwart individually-owned rooftop solar systems and independent solar suppliers and indenture customers.
In a letter to the editor of the Post, NRECA CEO Jo Ann Emerson said the article missed the bigger picture: the more than 75 percent of consumers who have situations not suitable for rooftop solar. “Community solar brings together utilities, solar manufacturers and consumers as partners, upending the ‘us-vs.-them’ fight described by the Post, and enables cooperatives to provide members the electric service they want while ensuring safety, reliability and affordability,” Emerson wrote.
Monroe at Tipmont noted the goal of its community solar isn’t to compete with solar installers. “It was mainly to help members that can’t participate in the traditional means of solar,” he said. “If a member has solar on his house, that’s just kilowatt-hours we don’t have to buy through other means. So down the road, it’s just going to help us.”
Community solar makes solar energy accessible to a much broader audience. By offering community solar programs, co-ops are meeting market needs, bolstering their brand, increasing consumer satisfaction and supporting their local economy.
When the sun’s rays peak on Tipmont REMC’s 240 community solar panels, around 10 a.m. to 3 p.m. on clear days, each 410-watt panel can produce about 1 kilowatt-hour of electricity every two and a half hours. Over a month, each panel will produce an average of about 50 kWh. That’s about $5 worth of electricity credited to each shareholder’s bill. The amount will increase as rates rise in the future.
The 25-year lease for a single share of the array is $1,250, and Tipmont offers payment plans. Tipmont figures the pay back to shareholders through bill credits will be about 15 years. And while typical future rate increases were considered in the payback, Monroe said what happens to rates with current and future clean air regulations under consideration were not — making the estimate conservative.
But echoing Morrison, Monroe said it’s not necessarily about a payback. “They’re getting into it to do the right thing [for the environment] and to participate in something bigger.”
Tipmont REMC serves 22,000 consumers in the counties surrounding Lafayette/West Lafayette and Purdue University and Crawfordsville. Its membership has long been a strong supporter of earlier clean-energy initiatives. Over 900 members, for instance, participate in Tipmont’s version of the EnviroWatts alternative energy program.
So far, about a third of the panels have leased. Though geared toward the residential consumer, Monroe said participants do include some commercial accounts. He added interest is still growing and expects to add more shareholders this spring.
Holcomb noted that the community solar program is being funded by the consumers who participate. The unleased panels are still benefiting the co-op at large. “The energy generated, that is not allocated to participating members, is used to offset Tipmont’s wholesale power costs,” he said. “That’s an important point.”
Community solar is just a dapple in a broad spectrum of change that is slowly but surely breaking down the monolithic model of how electric utilities have operated for a hundred years or more, Holcomb observed. He said viable third-party options for power, local distributive generation, are all changing the model from a “cost of service” to “market pricing.”
“It’s an exciting new frontier,” Holcomb said. “It’s certainly a rewarding time to be in the business.”
Richard G. Biever is a senior editor of Electric Consumer. Some of the information for this story was provided by the National Rural Electric Cooperative Association and its Cooperative Research Network.