A new dawn for local solar industry growth

FORT COLLINS – On Feb. 24, staff at The Atmosphere Conservancy barely had time to celebrate their latest prospective solar project before things took a dark turn.

The Fort Collins-based nonprofit facilitates solar and renewable energy projects for other nonprofit entities, including universities and housing authorities. TAC had just signed an agreement to move forward with the installation of 56 kilowatts of photovoltaic solar panels on the roofs of an affordable-housing complex for retired farmers in Milliken. Similar solar installations have helped reduce low-income residents’ utility bills and paid out savings to housing authorities through Xcel Energy’s Solar Rewards program, meant to offer rebates and renewable energy credits to promote new solar construction. Xcel, the service provider for the town of Milliken, and much of Colorado, had even given a $30,000 grant to enable the project.

However, the same day, Xcel announced that it was ceasing its solar-rebate program, claiming the industry no longer needed the financial breaks.

The housing authority and retired farmers of Milliken – and plenty of others – may disagree. The price of the roughly $300,000 solar installation would have dropped by one-third under Solar Rewards, but now TAC must figure out how to finance the entire cost – or shelve the project, according to Executive Director Alex Blackmer.

The state Public Utilities Commission held a hearing March 4 on Xcel’s sudden solar freeze, and announced it could make a decision to reverse the cuts on March 11.

But while the rest of Colorado’s solar industry is suffering a blackout, the city of Fort Collins is poised to become a national trailblazer for another kind of renewable-energy incentives.

City officials and council members are taking initial steps to implement a pilot project to stimulate local, renewable energy projects, including community solar gardens, where households and other entities can purchase a share of a solar array to power homes or buildings. A national nonprofit group, the CLEAN (Clean Local Energy Accessible Now) Coalition has zeroed in on Fort Collins as an ideal incubator for the program, and its staff is working with city staff to draft local legislation that could be voted on by council this summer.

For a city that didn’t benefit from Xcel’s solar rebates because it has its own utilities department, the program could mean a major flip-flop in activity on solar projects. Fort Collins could become a hotbed for new renewable installations, just as the rest of the state’s solar industry has hit a wall.

In unison with economic plan

Speaking before the Fort Collins City Finance Committee on Feb. 28, Craig Lewis of the CLEAN Coalition said a local solar incentive program would work “in unison” with existing city policies, including its economic action plan, greenhouse gas-reduction action plan, and the Fort ZED initiative to create a zero-net-energy downtown district. Under Fort Collins Utilities policy, the city aims to increase its use of solar, wind and other alternative energy to 15 percent by 2017; the state’s renewable energy standard mandates that municipal utilities with over 40,000 customers hit a 10 percent target by 2020.

The CLEAN solar program first came to the attention of city leaders during an after-hours event organized by the Rocky Mountain Innosphere in early 2010. A presentation piqued the interest of members of the Northern Colorado Clean Energy Cluster and city officials. Staff from Fort Collins Utilities and the Platte River Power Authority began cooperating with the CLEAN Coalition last fall to figure out how a plan might function for the city.

The program would use predefined and guaranteed purchase contracts between the utilities department and solar operators that would set fixed rates for 20 years. Also referred to as feed-in tariffs, the policy should over time facilitate a drop in the cost of solar energy, as the scale of the industry grows, to become more closely aligned with the price of fossil-fuel power. European countries have used feed-in tariffs to hike their renewable use way above American levels.

While a few U.S. cities have implemented feed-in tariffs, Fort Collins would be the first to do so under the CLEAN program.

“This will provide tremendous recognition for the city of Fort Collins,” Lewis said.

A draft of a two-year pilot project minimizes any ratepayer increase to no more than 1 percent, to prevent city residents from shouldering a massive rise in utility bills. The program would get a significant boost from a state law that enables municipal utilities to triple the value of the renewable energy credits issued for solar projects; the state policy, enacted to increase local renewable projects, lasts through 2015.

The resulting increase in tax revenue from the renewable energy credits could help support energy efficiency programs for low-income housing and would enable the city to meet its renewable-energy goals. Members of the finance committee did raise concerns over some details, but expressed early support for the CLEAN concept.

Upfront financing needed

Since feed-in tariffs don’t function the same as rebates, solar installers would still need to finance all projects up front, said The Atmosphere Conservancy’s Blackmer. But, he added, the city policy should facilitate new solar arrays in a range of sizes, including community solar gardens.

The PUC is also tied up in drafting rules for solar gardens under investor-owned utilities, such as Xcel, but as a city utility Fort Collins can forge ahead. The six-acre “Pickle Plant” site at Mulberry Street and Riverside Avenue has been mentioned as a location for a solar garden, and Blackmer said there are plenty of opportunities in the city for the solar industry to take off if the CLEAN pilot project is approved.

“From here, we have the framework and now we have to move forward,´ said Steve Catanach, Fort Collins light and power manager.

With an eye on city renewable goals and a chance for Fort Collins to be a national pioneer in solar incentives, Catanach said utilities staff would refine program details based on feedback from the finance committee. Following the April 5 election, the new city council could weigh in on the policy this summer.

“Clearly, a priority for the incoming council and mayor will be utilities,´ said city manager Darin Atteberry, speaking at the finance committee meeting.

on Facebook on LinkedIn