Investor-owned utilities around the country have taken an interest in community solar. They see it as a way to meet customer demand for more solar, while still owning the generation capacity. This has led to projects of varying quality in terms of actual consumer benefit. Nebraska is different. It is the only state where every customer is served by a publicly-owned utility. Recently, Lincoln Electric System (LES) inaugurated its first community solar project. The genesis of this project shows that solar can grow when utility customers have a say in their electricity source.
The project started with a survey that LES conducted in 2013 to determine customers’ interest in solar power. Three years later, LES cut the ribbon on a nearly 5 MW solar facility. It provides enough electricity for 900 homes. More than 1,200 LES customers signed up to voluntarily pay extra on their monthly bill to support the project through a program called SunShares. This totals a customer investment of $100,000. The story of how the solar array came to exist is an interesting case study of how public opinion can influence utilities towards the adoption of renewable energy.
“A core attribute of being a public power utility is customer participation,” said Kelley Porter, Manager, Customer and Corporate Communications at LES. “Various environmental organizations and individuals were urging LES to bring more locally located, renewable resources like wind and solar into our generating resource mix, decreasing our reliance on fossil fuels.”
The survey asked 25 questions of customers in LES’ service area. It was designed, per its Executive Summary, “to assess awareness of renewable energy, attitudes towards renewable energy, concern over LES’ reliance on coal-fired power generation, willingness to pay more for renewable energy, and the importance of having solar power projects in the Lincoln area.”
Two-thirds of respondents said it was important to receive at least some of their electric power from renewable sources. One third indicated it was very important.
“LES wanted to provide an outlet for customers who were passionate about seeing a local solar project,” Porter said. “LES also saw value in building in-house experience with large-scale solar, both from the standpoint of what it might potentially mean to our future generating resource portfolio, as well as what the local distribution system impacts might be from future customer-driven projects.”
“There are currently 1,248 participants in the SunShares program, with monthly contributions of approximately $6,000 per month,” Porter said. “The minimum donation is $3.00 per month.”
LES originally looked at tying the program to a customer’s consumption, but it found that its customer billing system did not then offer this as standard functionality. LES decided to proceed with the program structured around voluntary contributions as a way to reduce overhead.
As a non-taxpaying entity, LES needed a third party to own the system in order for the project to be eligible for the 30% Federal Tax Credit. LES currently pays Enerparc an undisclosed amount for the electricity generated, as per its 20-year PPA contract. CPN tried to get that number in order to understand whether the deal being offered LES customers was fair. The truth is it is a bit hard to know without the numbers.
LES determined the $3.00 per month figure based upon its survey results. LES found the $3.00 minimum (with additional $1.00 voluntary increments) represented the program’s best value. “The $3.00 per month is a donation to build solar power,” said John Atkeison of the Nebraska Wildlife Federation. “There was a precedent for it. Utility-scale wind turbines were built in 1999 in the state, and LES employed a similar mode of donation.”
The West Holdrege solar facility was cleared for commercial operation on June 23. LES held a dedication event for the solar garden in September.
Nebraska is home to an abundance of cheap conventional energy. But despite that, Nebraskans are genuinely enthusiastic about solar. We asked why solar was embraced by LES’ customers despite the relative lack of financial incentive.
“Nebraskans understand the importance of the integration of renewable energy in today’s electric grid and how it positively impacts the environment,” Porter said.
The West Holdrege Street project is located on Interstate 80 near the airport and is highly visible to people entering and leaving Lincoln.
“The location of the community solar project provides SunShares participants, others in the community and visitors to our city the ability to view the array,” Porter said. “Similar to LES’ two wind turbines along Interstate 80 on the northeast side of Lincoln, this project will serve as a visual display of LES’ commitment to serving its community’s energy needs in an environmentally responsible manner.”
This solar project is just one step. LES will soon roll out a new virtual net metering program. It is being finalized now and LES expects to have it in place by December of 2016. For a limited time, all existing SunShares participants will have the ability to roll their to-date contributions towards their initial enrollment in the virtual net metering program.
“Under this new program, customers will now have the option to take a more vested interest in the community solar project, making a one-time payment to place virtual panels at their home or business,” Porter said. “Each virtual panel generates the equivalent of one physical panel at the project, and participants will receive a credit on their electric bill each month related to the number of virtual panels they ‘purchased’ and the actual energy production of the solar facility.” Stay tuned for the details.