Erin Buchanan Iowa League of Cities Annual Conference September 28, 2017
About CFU Municipally owned, serve the City of Cedar Falls and outlying areas. Provide electric, natural gas, water, cable TV, high speed data and soon phone services Take pride in supporting our innovative community through excellent service, while retaining low rates
What is “Community Solar”? Includes many types of solar projects Ownership structure, technology types, and benefits for participants vary Commonality: Several participants funding and benefitting from the construction of a single array or group of arrays
Why We Picked Community Solar Cedar Falls is fairly progressive and CFU well-respected, so we thought a community-based project would take hold here. Solar provides a good balance to wind generation.
Our Objective Develop a community solar project that would: Provide for broad and direct customer participation Be financially supported by those customers with an interest and willingness to participate financially Be local and visible in our community Showcase renewable energy
Our Concept – Utility Participation CFU would coordinate construction of a large solar array, owned & maintained by a 3rd party (tax reasons) CFU would buy the energy from the owner through a long-term agreement (25 years) CFU would have the right, but not obligation, to purchase the array once construction tax benefits are exhausted Customers can participate by purchasing “units” in the array, which provides a monthly bill credit for 20 years.
Our Concept - Customer Participation Make an upfront payment to CFU Recover this over time through a monthly CFU bill credit Bill credit based on the customer’s proportional share of the array, and based on the actual monthly production of the array Credit based on CFU’s “avoided” cost – CFU essentially replaces market energy with this solar energy purchase Avoided energy, transmission capacity, and generation capacity costs
Our Concept - CFU Economics Our objective was to make this a financial break even – so the costs and benefits are equal over time. The variable is the upfront customer contribution. We varied this in modeling until the net present value = 0 Thus in theory non-participating customers are not impacted.
Exploration Process – The Location Identify the site Cooperation with City of Cedar Falls Local park 8 acre site leased at no charge Visibility and engagement for the public and CFU customers
Exploration – is the price right? Obtained bids for 500 kW, 1 MW, and 1.5 MW arrays For maximum accessibility to customers, desired price of less than $500 per unit Wanted to start with “worst” case/most expensive scenario (i.e., 500 kW bids) Decided on 170 watt increments (“units”) for $399, based on 500 kW bid data
Pre-enrollment campaign The customer deal: $399 upfront per unit (can pay over 12 months) Monthly bill credit for 20 years If customers move off CFU system or otherwise no longer pay a CFU electric bill, ability to transfer units or sell them back to CFU Emphasized this isn’t a quick financial payback for customers. No guarantees. Would we get enough interest? We’d need commitments for at least 3000 units.
Pre-enrollment Campaign Marketing Direct mail to every customer Meetings with businesses Multiple open houses Press release and press invitation to open house, resulted in excellent coverage TV advertising Website and CFU newsletter articles Social media Service clubs Farmer’s Market UNI events
Direct Mail
Open Houses
TV Advertising
Pre-enrollment campaign – Results UNI and the City helped tremendously by signing on to roughly 25% of the array’s capacity Customer pre-enrollments were excellent – 1250 households and businesses Participant interest levels ranged from 1 unit to several hundred units 5500-7000 units at campaign end – enough for nearly 1.5 MW. So – away we go!
Turning Community Interest into Community Solar Pre-enrollment let us to pick the “right” size solar array and bid Based on customer interest, we negotiated for construction of the largest size for the 8 acre site, roughly 1500 kW AC (over 8,000 Units) Unit price set at $270 – further increased participation Buyout options after year 7 Commercial Operation – April 1, 2016
Ready for Commercial Operation
Now 1.5 Years into Commercial Operation Hitting Performance Milestones Enough energy produced to power about 260 homes per year Peak production is months of May-July Daily peak production coincides fairly well with CFU’s daily peak power demand
Live Dashboard
Now 1.5 Years into Commercial Operation Fully subscribed 8,682 units, about 1,300 accounts participating If participants move away, new ones are subscribed from a waiting list annually Many tours and educational opportunities