Grist: John Farrell

Susan Osborne Explains Why Boulder Opted for a Clean Energy Takeover

John Farrell — Mon, 20 May 2013 11:41:39 +0000

The process started in 2003 when Boulder resumed studying the option to create a municipal utility. With a climate-action plan already in place, and a local carbon tax already financing conservation and clean energy, the once nascent issue became a serious option in Boulder. Creating a municipal utility would allow for more control over the grid, reductions in greenhouse gas emissions and an increase in clean energy production. As former Boulder mayor Susan Osborne described, Boulder didn’t set out to “blaze a trail” for local ownership of its electric utility, but for a growing number of cities across America considering municipalization, there’s a lot to learn from their remarkable story.

Local Energy Rules Podcast with Susan Osborne: Play in new window | Download | Embed

The process started in 2003 when Boulder resumed studying the option to create a municipal utility. With a climate-action plan already in place, and a local carbon tax already financing conservation and clean energy, the once nascent issue became a serious option in Boulder. Creating a municipal utility would allow for more control over the grid, reductions in greenhouse gas emissions and an increase in clean energy production. Xcel forestalled the city’s investigation when it offered to pilot its Smart Grid City in Boulder – a program that deployed advanced meters and fiber optic cables to improve information flow on the local electricity grid.

Unfortunately, Susan said, the smart grid pilot came in over budget and underwhelming for the city’s residents. Despite further efforts to negotiate with Xcel to secure a lower carbon energy future, the city’s franchise contract with Xcel wasn’t renewed, and citizens replaced the lost revenue with an electricity tax to give the city time to study alternatives. Municipalization was back on the table.

By 2011, it became clear that Xcel wasn’t willing to give the city what it wanted (a last-ditch offer was stymied when Xcel insisted that the status quo also be placed on the ballot). The city put municipalization on the ballot in 2011 and the campaign began. Xcel spent over $1 million dollars in a failed attempt to kill the ballot initiative, outspending local energy advocates 10-to-1. In the end, Boulder citizens voted in November 2011 to part ways with Xcel, voting to form a municipal electric utility and to tax themselves to fund the investigation of whether this new utility could meet ambitious clean energy targets.

Although Susan has since retired from the city council, the effort continues, with city officials still talking to Xcel about options. But the release of a recent report on municipalization suggests that the city can significantly increase renewable energy, reduce emissions, lower costs, and improve reliability. In other words, there seems little reason to settle for the status quo.

Want to hear more from Susan Osborne? Check out this video of her talking to Minneapolis citizens about Boulder’s efforts for clean, local energy.

This is the 5th 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!

Filed under: Article

8 Vivid Charts – 8 Reasons for a Solar Energy Standard in Minnesota

John Farrell — Mon, 13 May 2013 21:30:18 +0000

A conference committee is resolving differences between House and (much weaker) Senate versions of a solar energy standard in Minnesota today. Here’s 8 graphic reasons why the state should go for solar as aggressively as it can.

8 Vivid Charts – 8 Reasons for a Solar Energy Standard in Minnesota from John Farrell

Filed under: Article

The Making of a New Midwestern Solar Energy Standard

John Farrell — Mon, 06 May 2013 15:15:12 +0000

Last week, a solar energy standard moved one step closer to passage in the Minnesota state legislature, with an innovative new approach to financing solar power. It’s a powerful first step for what would be one of the more robust policies to support distributed, local solar power in the country.

The policy has three key pieces, outlined below.

A Solar Standard

Following in the steps of 16 other states, the House version of the Minnesota bill sets a timeline for (investor-owned) utilities to add solar to their electricity mix:

0.5% of electricity sales by 2016

2.0% of electricity sales by 2020

4.0% of electricity sales by 2025

And, an “objective” of 10% solar by 2030

Unlike other states, this solar energy standard is not a carve-out of the existing 25% by 2025 renewable energy standard, but is in addition to that standard.

The following chart compares the proposed standard to those in force in other states:

Paying for Production: The Value of Solar (VOS) & Incentive

In addition to the standard, the legislation requires utilities to mimic the VOS calculation popularized by Austin Energy in Texas, essentially setting a market price for solar power (per kilowatt-hour) on the basis of its value to the grid. There are seven components address in the bill:

Line loss savings from avoided electricity imports on the transmission and distribution grid
Capacity savings from avoiding upgrades to transmission and distribution systems by providing local power
Energy savings from reducing wholesale energy purchases
Generation capacity savings from offsetting the need for new (peak) capacity
Fuel price hedge value from a zero fuel cost energy source
Environmental benefits
Economic benefits from the growth of the state’s solar industry

For more context, this article talks more generally about the value of distributed generation to the grid and this study [pdf] gets right into the nitty gritty of Austin’s calculation.

The VOS price will be combined with a production-based incentive (PBI) to offer solar energy generators a price sufficient to provide a reasonable return on investment if their project produces energy as anticipated. This “reference price” (VOS+PBI) will be differentiated by project size:

Residential
Small commercial (less than 25 kilowatt (kW))
Large commercial rooftop (25 kW to 2,000 kW)
Large commercial ground-mounted (25 kW to 2,000 kW)

As is implied above, no project larger than 2 MW may get the VOS or PBI, but rather would seek a power purchase contract via utility request for proposal or competitive bid process.

A Standard, Long-Term Contract

Utilities must develop and use a standard contract that offers producers the combined value of solar and PBI over 20 years. This dramatically simplifies the financing and development of distributed solar power projects and will hopefully mean the solar energy standard will be met with a diversity of utility-scale and distributed solar.

Summary

If the bill can win over legislators in the House and Senate, it promises to deliver over 1,300 megawatts of solar power to Minnesota electricity users, create over 5,000 jobs and pump more than $5 billion in the state’s economy in the next decade. It also promises to be very affordable, with a forecast blended cost per kilowatt-hour (for the incentive) of just 2.7¢ per kWh.

Should it pass, the solar energy standard will be a good fit for a state where the women are strong, the men good looking, and the energy policies are above average.

Filed under: Article

Farmer- and family-owned wind power rises in Iowa

John Farrell — Thu, 02 May 2013 17:55:26 +0000

Iowa ranks third in installed wind power capacity in the U.S., it’s 5,500 megawatts behind only Texas and California (and much higher per capita). But like many windy places, the turbines sprouting from the Iowa prairie are often owned by multinational corporations, taking advantage of the local resource and sending the electricity revenue out of state.

Iowa farmer Randy Caviness saw an opportunity to keep the value of Iowa wind local and he’s helped to develop eight utility-scale wind turbines with community ownership, providing clean, local and locally owned power to municipal and rural electric utilities in southwestern Iowa.

Listen to a conversation with Randy in ILSR’s Local Energy Rules podcast: Play in new window | Download | Embed

The idea began back in 2007, when Randy had an idea to build two wind turbines for the rural electric cooperative serving nearby farming communities. With grants from the USDA rural development program, Iowa production tax credits, and the federal section 1603 cash grant incentive from the 2009 Recovery Act, the two turbines were built in 2010. With the federal incentive slated to sunset in 2011, Randy and his fellow Green Energy Farmers made plans to erect six more turbines, financed by 180 local investors.

Shares in local wind projects were sold to friends and neighbors in the community. Most of the investors live within 30 miles of the turbines they own, and the dividends, tax-credits, and economic benefits remain in the community.The legal work was complicated, but not insurmountable. The state tax credits were capped at 2.5 megawatts, so each of the wind turbines are financed and owned by separate LLCs. Randy, along with local banks, was instrumental in setting up the financing schematics for all eight turbines.Community support for the projects was and is strong, and the local utilities have appreciated the source of clean, local, low cost power. Unfortunately, the expiration of the federal cash grant means there are limited opportunities to replicate the project, but the work of Randy and Green Energy Farmers stands testament to the power of collective ownership of clean energy.

This is the 4th edition of Local Energy Rules, an ILSR podcast that is published twice monthly, on 1st and 3rd Thursdays. 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 the energy program!

Photo credit: Flickr user cwwycoff1

Filed under: Article

Three Unequal Choices for a Local (Renewable) Energy Future

John Farrell — Mon, 22 Apr 2013 15:23:52 +0000

Earth Day highlights the need for a sustainable energy future, and experience suggests that there are only three meaningful choices for communities trying to increase local control of a greener energy future. But the three policies – deregulation (“customer choice”), municipal aggregation (“city choice”), and municipal utilities (“city ownership”) – are not equal. Two recent articles highlight the relative value of these policies quite clearly.

The Citizens Utility Board (CUB) of Illinois, a nonprofit ratepayer advocacy organization, just released a report on the results of electricity deregulation and municipal aggregation.

Deregulation or “Customer Choice”

CUB didn’t think much of deregulation (report PDF). They noted that while short-term savings on electric bills were significant (customers of ComEd and Ameren Illinois saw rate decreases of about 4.5¢ and 1.5¢ per kWh, respectively, for switching to a different supplier), these savings are short-lived because the incumbent utilities’ price premium will evaporate when long-term contracts expire in June, 2013. Some customers were signed up for cable-like contracts, with low initial promo pricing followed by rates in excess of 10¢ per kWh. Customers can’t just switch back, either.

“CUB is concerned that many offers it is tracking charge ‘termination fees’ of up to $175 if customers want to exit a contract early,” it said.

CUB also gave non-utility electricity providers a D- for their failure to compete on anything but short-term price savings, noting that “a more sustainable competitive model would focus on promoting energy efficient and money-saving technologies.” The industry association’s response isn’t very soothing, saying that “In other states that are further down the competitive road than Illinois, the association said consumer incentives range from half off and free power days to frequent-flier miles.”

In other words, deregulation in Illinois is mostly a marketing game with little substantive improvement in energy policy.

Municipal Aggregation (“City Choice”)

Municipal aggregation has been modestly better. Over 450 Illinois communities passed referendum for aggregation, allowing the cities to negotiate lower rates on behalf of small electric customers in their territory (combined with individual choice, nearly 2 million Illinoisans are served by non-utility providers). Rates are similar to individual retail choice contracts, but most cities have avoided termination fees and some, like Decatur, have a provision that guarantees a price match with the utility if prices fall, or a free switch back to the utility.

Some communities have even opted for cleaner energy, via purchases of renewable energy credits (RECs). Oak Park, IL, for example, has a contract supplying electricity with RECs from wind energy that offset 100% of the electricity consumption. No wind power is built in Oak Park, but an equivalent amount is added to the grid elsewhere.

In general, however, CUB notes that municipal contracts haven’t done much better than individual ones at focusing on lower cost energy via energy savings, efficiency, or demand response. Chicago’s recently signed deal is a “promising exception” (from the report):

One exception seems to be the City of Chicago’s “municipal aggregation” deal with Integrys Energy Services, which could become a model for other communities. Chicago’s plan, compared with others, employs more of an emphasis on efficiency and demand response, and it promises a coal-free portfolio for City residents. Plus, the contract contains the strongest consumer protections that CUB has seen in the state. The City has estimated that the offer could save consumers more than $100 over the course of two years, and the contract promises to meet or beat ComEd’s supply price at all times. Finally, it allows Chicago customers to exit the deal at any time, without paying an exit fee.

Municipal Utility (“City Ownership”)

The most challenging and most robust form of local control is municipalization, where a city buys the utility’s hardware and becomes the maintainer of the grid and the energy supplier. But it also gives communities the most leeway to innovate. Austin Energy in Texas has a commitment to 35% renewable energy by 2020 and has pioneered a “value of solar” payment that identifies a market price for solar energy based on its value to the electricity system. Gainesville Regional Utilities in Florida launched one of the first feed-in tariffs (also called CLEAN Programs) in the country in 2009, and the 15 MW online make it one of the world leaders in solar energy per capita and have helped the utility hedge against risk in its fossil fuel portfolio. The utility also has a goal of reducing energy sales 10% by 2015, from 2006 levels.

Boulder, CO, may become the most inspiring example of local leadership. Citizens authorize the city to form a municipal utility in a 2011 vote and a recently released report from the city highlights the remarkable opportunity. According to the report (and taken verbatim from the Boulder Daily Camera article), a local energy utility would be able to:

Offer lower rates to residential, commercial and industrial customers, not just on “day one” but over a 20-year time frame;
Maintain or exceed current levels of reliability, and future investments could enhance dependability;
Reduce greenhouse gas emissions by more than 50 percent from current levels and exceed the Kyoto Protocol goals within the first year;
Get 54 percent or more of its power from renewable resources, such as wind, hydro and solar;
Create a model public utility that would allow for innovation in everything from energy efficiency to customer service.

The city projects it could meet these ambitious and inspiring goals in addition to making debt service on buying the electric grid with a 25% reserve fund. It’s everything CUB wants to see from municipal aggregation and retail choice, in a single municipal utility concept.

The report lays out a promising future, but It’s still not an easy lift. The cost of buying the existing grid will be determined in a hotly contested court case, with Xcel Energy’s lawyers doing their best to make the price too high for the city to take over.

Conclusion

The lessons from Illinois and Colorado should be instructive to cities with options on the table (customer choice and city choice typically require state-level authorizing legislation). Even without these options, the expiration of long-term franchise contracts with utilities may provide cities with leverage to improve their energy future. A campaign in the city of Minneapolis, MN, for example, hopes to use the franchise negotiation to help the city council leverage more clean, affordable, reliable, and local energy. But the big gains come from the big lift, and – if successful – Boulder may set a new standard for sustainable public utilities.

Filed under: Article

From soybeans to solar – a community energy project sprouts from Wisconsin fields

John Farrell — Mon, 15 Apr 2013 18:00:59 +0000

Just north of Delavan, Wisconsin, is Dan Osborne’s nursery farm. Where you once found a bean field now sit 80 solar panels on 100 tracking towers, generating renewable power for over 125 homes. It’s a small, but successful community-owned energy harvest. The solar farm was developed by Convergence Energy of Lake Geneva, WI and has owners from all around the region.

In an interview with John Farrell and Wade Underwood of the Institute for Local Self-Reliance, Steve Johnson of Convergence explained, “The genesis of the project from the beginning was to try and provide an offsite location for individuals interested in investing in solar.” It’s just one part of a distributed renewable energy revolution that’s likely to – as Grist’s own David Roberts said, “completely f*ck up the utility business model.”

Listen to the Podcast: Play in new window | Download | Embed

Click to subscribe to Local Energy Rules: iTunes or RSS/XML

Many individuals interested in going solar can be stymied because their property has tree cover or inadequate roof space, or they don’t own their rooftop. Dan Osborne’s fields offered an alternative: sharing in the energy from a community solar project.

Dan, who had worked with Convergence in the past, offered up 14 acres of his farm for the 660 kilowatt (kW) facility outside of Delavan. From there, Convergence arranged for 33 individual Limited Liability Companies to invest in 20 kW increments, which are sold back to the utility at retail price as a part of the state’s net-metering policy (note: unlike others, this utility’s net metering policy does not require the solar project to offset on-site load). The state’s net metering policy caps projects at 20 kW, hence the 33 separate companies.

In addition to receiving the retail electricity price for solar electricity produced, the projects also received grants from the state’s Focus on Energy program and used the cash grant option (since expired) in lieu of the 30% federal tax credit. Project investors signed up for either an 11-year or 20-year investment term (with an 8% return on investment) after which the project ownership reverts to Convergence Energy.

As Steve says, their investors are happy with the solar farm, but there have been precious few opportunities for similar networked projects to grow. The federal cash grant program has expired. The state’s Focus on Energy incentives have been reduced. Few other utilities allow net metering reimbursement if it’s not produced on-site – only eight states have policies that expressly require such “virtual net metering.”

Although Convergence Energy hasn’t been able to replicate the program in Wisconsin, the continued drop in the cost of solar (and increasing utility rates) is driving more electricity customers to look to producing their own clean power. Community solar projects have been sprouting up in other parts of the country, featuring new barrier-busting strategies. The Clean Energy Collective has a community solar model that’s working in diverse places like Colorado, Minnesota, New Mexico and Vermont. Mosaic has launched a crowdfunding platform that will make it even easier for neighbors to pool their resources to generate their own renewable energy.

It might be just one bean field in Wisconsin so far, but the community solar project on Dan Osborne’s bean field is part of a paradigm shift toward more community-based renewable energy.

Filed under: Article

Utility “Gets Ready” for More Local Energy in Hawai’i

John Farrell — Tue, 09 Apr 2013 15:02:27 +0000

Hawai’an solar advocates are celebrating after the island state’s largest utility, Hawai’ian Electric (HECO) filed a plan with the public utility commission to take a “proactive approach” to adding more distributed solar to their grid system.

Utilities across the country typically use “conservative blanket limits” on the amount of renewable energy allowed on local circuits (the power lines connecting to homes and businesses), generally 15% of peak load. In most places, solar energy production falls far below these limits. But in the few places where it’s not, customers wanting to generate their own electricity must pay for a “costly and time-consuming study of the potential impacts on their circuits.”

Such limits have previously created logjams of solar installations awaiting utility action. In 2012, for example, there were as many permits issued for new solar on the island of Oahu alone as in the entire state over the last decade. In Honolulu, close to half of the building permits filed in recent years are for solar power.

From now on the utility hopes to stay ahead of the torrid pace of solar installations. It’s a remarkable change of heart.

In 2010, HECO proposed a moratorium on new solar installations on many of the islands, but quickly retracted the proposal in the face of strong local opposition. As more solar has been added to the grid with few ill effects, the utility has reconsidered.

Last October, HECO raised the limit on the their local circuits to 75 percent of minimum load (which roughly translates to 23% of peak) for certain smaller renewable energy systems. The proactive approach in the utility filing means that HECO may soon follow California utilities, which raised their limit last year to 100 percent of minimum load, or near 50% of peak demand. (for more on this progress, see this infographic – How Archaic Utility Rules Stall Local Solar).

The changes are important, because Hawai’i is a solar industry bellwether, where the cost to produce solar electricity is already lower than retail grid electricity prices (grid “parity”). The state’s solar market has already revealed the “beyond cost” barriers to solar, and – now – the potential solutions. The adjustment by HECO and other island utilities around grid limits to solar removes the next level of solar obstruction.

Ultimately, the change indicates a recognition by the utility of the changing electricity system paradigm. Namely, consumers are becoming producers, and want the rules to support their interest in self-reliance, energy savings, and local power generation. A coming surge of cost-effective local solar means utilities must get ready. HECO may be one of the first utilities to prepare, but it won’t be the last.

Filed under: Article

Cloudy Days for a Washington-State Community Solar Effort

John Farrell — Mon, 01 Apr 2013 21:02:46 +0000

The Backbone Campaign’s community solar project was motivated by a generous production incentive offered in Washington State for solar projects installed on public property. Campaign organizer Bill Moyer and many residents of King County, WA, hoped to keep more energy dollars in the local economy by using this incentive to create a community solar project in partnership with the county government.

But it wasn’t smooth sailing, as Bill explains in this January interview with the Institute for Local Self-Reliance’s John Farrell.

In trying to bring the project to fruition, Bill ran into many limitations of the state incentive program and federal rules for pooling money to invest in local solar. In this interview, Bill notes, “people’s eyes glazed over” with confusion as he tried to explain all the regulations standing between the campaign and local community solar.

Podcast (localenergyrules): Play in new window | Download | Embed

Click to subscribe to Local Energy Rules: iTunes or RSS/XML

Among the most frustrating barriers were the time constraints on the incentive period, which expires in 2020. Identifying an appropriate site took a year and a half, for example, cutting into the time to find the best way to organize investors. The state-level version of the Securities and Exchange Commission has rules that make it hard to organize capital with the clock ticking on the incentive, the project is stalled.

Despite the trials of his own project, Bill gives us reason to believe there will be better news in the future of community solar. More and more people are looking for ways to plug what he calls “equity leaks,” dollars leaving the community, and energy is a prime opportunity. As states improve their policies for distributed renewable energy, it will open the door to more community solar.

You can read more about the proposed Vashon community solar project in this previous Grist post.

This is the second 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.

Filed under: Article

Solar cooperative gets panels on 1 in 10 roofs in Mt. Pleasant neighborhood of DC

John Farrell — Wed, 27 Mar 2013 16:38:55 +0000

What began as a group of neighbors hoping to reduce their impact on global warming has since become a major force for solar advocacy in Washington, DC. The Mount Pleasant Solar Cooperative was started by two teenage boys who wanted to make solar power convenient and affordable through a bulk-purchase program. Along the way, the cooperatives new members realized that buying power wasn’t enough, and sought out changes in the district’s energy policies. Today the Mount Pleasant Solar Cooperative has helped to get solar panels on over 10 percent of the homes in the Mount Pleasant Neighborhood and has grown into a city-wide political organization.

Podcast (localenergyrules): Play in new window | Download | Embed

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

In December 2012, John Farrell spoke to Anya Schoolman about the growing political role of the Mount Pleasant Solar Cooperative in the larger D.C. area. As Anya explains, their success is attributed to an on-going cycle of project development, organization and policy work, a process that has proven successful since the cooperative started in 2006. Having achieved many of their immediate goals for more affordable community solar–and with a growing network of solar constituents–the cooperative hopes to continue pushing for legislation that will enable solar in greater D.C.

Anya’s most recent undertaking is connecting with other groups looking to develop community-based solar and other renewable energy projects. The Community Power Network, a directory of grassroots organizations working to build locally-based renewable energy projects, was started as a vast information resource and communication hub for interested organizations. Through the Community Power Network, Anya and activists across the country are able to share their experiences, expertise and technical assistance to grow community power.

This is the first 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!

Filed under: Article

Two Ways Americans May Get More Ownership of their Energy Future

John Farrell — Wed, 20 Mar 2013 17:21:17 +0000

Three years ago, the prospects for Americans to own their energy future seemed relatively bleak. There were almost no replicable models for doing community-based energy projects or investment, despite falling costs and technology – solar and wind – that lend themselves to local development.

But thanks to recent opportunities in community solar and crowdfunding, we may see a renewable energy market in America where everyone wins.

Let’s start with solar. It’s the ultimate decentralized renewable energy – sunshine falls everywhere – and its cost is falling so fast that, within a decade, 300 gigawatts of unsubsidized solar will be competitive with local electricity prices in communities across the country. In 2010, just one model for developing community solar had proved readily replicable and there was no practical way to pool a community’s collective capital to invest in local energy (except perhaps a municipal utility, a story for another time). Since nearly three-quarters of residential rooftops are not suitable for solar, it was hard to see how most Americans could use the sun to brighten their energy future.

But in 2013, community solar is rising fast. Colorado’s community solar gardens program – selling out its 9 megawatt limit in a half hour – illustrates a powerful model for letting people pool their money to go solar, even if their own roof isn’t theirs or isn’t sunny. Some companies in Colorado have already brought their model to other states, like the Clean Energy Collective‘s community solar project with the Wright-Hennepin Electric Cooperative in Minnesota, and other states (like Minnesota) are considering legislation to expand the opportunity.

The year 2013 may also be remembered for opening the crowdfunding floodgates.

In late 2012, California-based (Solar) Mosaic launched their first community solar investment project, allowing 51 California investors earn 6.38% returns for investing in a 47 kilowatt (kW) solar array on the roof of the Youth Employment Partnership in Oakland. Their subsequent 235 kW project ups the ante, and was open to regular folks in California and New York (and accredited investors in all 50 states). It sold out in just 24 hours to over 400 investors with an average stake of just $700. The investment uses a common securities law exemption (Rule 506 of Regulation D), and investors will earn a 4.5% annual return (net of fees) over 9 years, greening the economy and their pocketbooks.

The key advantage of Solar Mosaic is the investment. Previous community solar projects have relied on shared electricity savings for participants, sometimes called virtual net metering. This limits prospective investors to the same utility service territory, and the savings can’t be taken to a property outside that area. The Mosaic model turns community solar into a simple investment, letting prospective investors select a particular Mosaic project to invest in, with significantly higher returns than parking money in a U.S. Treasury or savings account. For now, it’s limited to broad participation in just two states, New York and California, but Mosaic is “working hard” to expand the opportunity.

Mosaic may be just the first salvo in a firestorm of community renewable energy investment. The federal JOBS Act of 2012 intends to create a new segment of investment security with much lower upfront and legal costs that would let crowds pool up to $1 million for solar and other renewable energy projects.The only “drawback” in the Mosaic model is that it doesn’t explicitly connect geography with investment. A New York City resident, for example, can invest in a project in California, but not in Manhattan or the Bronx. If this model continues to be successful, however, it’s likely that will change.

Crowdfunding doesn’t have to be limited to renewable energy, either. People could pool their resources to invest in block-by-block residential energy efficiency retrofits, reducing their own and their neighbors’ energy bills and sharing the energy savings with other local investors. Crowdfunding for energy efficiency could be combined with commercial building energy ratings (just enacted in Minneapolis, MN, for example) to target the least efficient buildings with the most potential for savings. Local shared investment wouldn’t just tap and share more energy savings, but would boost the local economy by putting idled laborers to work making buildings more cost-effective and less climate harming.

Both community solar and crowdfunding are in their infancy, but they represent two powerful tools for Americans to take charge of their energy future.

Photo credit: Mosaic

Filed under: Article