Solar Express: Businesses, utilities lead the solar charge

cherryland-verticalThe ever-increasing demand for renewable sources of energy, combined with growing interest in local power generation, has made for some key developments in northern Michigan’s solar industry this year. Whether its consumers investing in residential systems, businesses installing large solar arrays or utilities figuring out how renewable energy sources will play a larger role in their power offerings, solar is … pretty hot.

Rooftop Solar … In Tree City

Despite long-held perceptions that the region is too cloudy and the city too tree-covered, there is growing momentum for rooftop solar in Traverse City. Just ask Dan Worth, clean energy policy specialist for the Groundwork Center for Resilient Communities.

“You definitely can do it here,” said Worth. He heads up the Groundwork Shines program, an effort to get more rooftop solar panels on local homes. It launched earlier this year to help people seriously interested in investing in solar infrastructure get a right-sized system “expertly installed at a fair price.”

Price is the key issue where solar is concerned – it is a significant investment upfront for the typical homeowner or business owner, but the return is becoming more attractive all the time.

“The price of solar has been dropping 10 percent annually for the last few years,” he said.

So far, the program has worked with about 125 customers – 25 business and 100 residential – representing about one megawatt, or $3 million worth of solar, according to Worth.

“There have been 10 rooftop solar installations this year, 25 folks seriously considering it or talking with an installer, and about 25 who will likely make the move next year,” he added.

Key to the program is a 30 percent solar tax credit on residential and commercial properties recently extended through 2023.

The local wine industry, in particular, has led the march toward solar on the commercial side of the equation, with Chateau Chantal on the Old Mission Peninsula and Black Star Farms and Brengman Brothers on the Leelanau Peninsula all making significant infrastructure investments in larger-scale systems in the last few years. Short’s Brewing Co. also installed solar panels on the rooftop of its production facility in Elk Rapids last year.

Critical to this development, Worth said, has been the federal REAP grants – available to agricultural producers and rural small businesses to assist in the purchase of renewable energy systems.

Worth said the local manufacturing sector is going to make the next big play with solar, and noted several facilities have already been identified as good sites for installing systems.

More Solar In Public Power Supply

Both municipal utility Traverse City Light & Power (TCL&P) and member-owned Cherryland Electric Cooperative (CEC) are responding to the changing landscape of power generation and to louder calls for renewable and cleaner sources of energy.

“We don’t have our head in the sand,” said Rachel Johnson, member relations manager for Cherryland. “We know this community wants to see more solar.”

In response, Cherryland is rolling out a trio of options for customers that it anticipates will lead to significantly more solar investments and local generation. “What we are offering now is innovative and unique …I don’t know of any other rural utility in the country doing it.”

First up is a 1.2 megawatt community solar project that broke ground last month in Cadillac and will be generating electricity come January. The array is being constructed by Cherryland’s power supplier, Wolverine Power Company, and will be open to all of Cherryland’s membership to buy “a share” in it and receive a credit on their bill for the solar output. (For size comparison, Cherryland’s community solar array in partnership with TCL&P on U.S. 31 in Grawn is a 52 kilowatt system. That system is fully subscribed with a waiting list.)

Cherryland is also launching a “buy all/sell all” program that officials expect to spark more solar investment – in which a customer would sell all the energy it produces from its solar array to the cooperative and then purchase what it needs back.

“It’s a good option for a business that wants to invest in solar because we’re doing 20-year contracts at 10 cents per kilowatt hour … and there is still that 30 percent tax credit for businesses that have that tax appetite,” added Johnson. “We expect to see an increase in the number of large-sized arrays in our region.”

Cherryland did, however, generate some backlash from local solar advocates when it announced this spring that it was ending the subsidized rate it was paying individuals and businesses for their own renewable energy generation through its net metering program. It had been paying 11 cents per kilowatt hour for any excess energy added to its grid and announced that as of November 1 that rate would be dropping to the market rate of approximately 3 cents. Cherryland has since revisited that plan and has now set a rate of 5.6 cents per kilowatt hour.

“That’s Cherryland’s all-in energy rate annualized,” said Johnson, or the annual average cost of what it pays for all its sources of energy (i.e. coal, natural gas). “We believe it’s a fair rate for solar.”

The reaction from membership, in particular local solar installers, to this new rate has been mixed, Johnson said. Groundwork’s Worth said he finds the 5.6-cent rate “still troublesome,” believing that solar still needs to receive a significant subsidy as it continues to grow.

Meanwhile, municipal utility Traverse City Light & Power (L&P) is entering negotiations on a potential purchase agreement of solar energy from what would be the largest solar array in the Grand Traverse region by Traverse City-based Heritage Sustainable Energy.

The one megawatt solar array is proposed for land Heritage owns adjacent to the wind turbine on M-72 in Elmwood Township. The company also owns the turbine, purchased from TCL&P in late 2014 after it had been sitting idle for more than two years due to operational issues. (It has since got the turbine up and running once again and the company uses the energy to support operations in another private venture.)

“Having a solar array of this size tied to your distribution system is unique and valuable,” Rick Wilson, Heritage’s vice president of operations, told the TCL&P directors at a recent meeting. “That’s the opportunity we’re looking at providing you with.”

TCL&P Executive Director Tim Arends said a recently-completed system impact study it required of Heritage showed the utility would be able to accommodate the project within its current distribution system. The next step is for the two parties to negotiate a fair rate for the purchase of that power.

“A one megawatt system within our footprint is a big project,” said Arends, even more so for its predominately tree-covered footprint. “My directive from the board is to pursue any and all generation opportunities, as long as they are cost-effective for the rate payers.”