In Longmont (as in most other places) our door to door organizing has revealed that people strongly value an energy policy that supports the local economy in an environmentally responsible and socially equitable way. That is why we are asking our public electric utility to thoroughly explore and vet the Utility Ownership of Distributed Solar (UODS) model.
UODS is different then current solar models - net metering and power purchase agreements (PPA). With net metering the utility buys power from a solar owner at the retail rate (limited to 120% of owner’s electric usage) . This is problematic because non-solar Longmont customers are paying a 100% profit margin to solar owning customers. That is not very socially equitable or financially sustainable as solar adoption grows. It also limits solar to those willing and able to expend capital. PPAs are cheaper but typically occur on remote open space or agricultural land and give our non-profit utility dollars to out of town investors. PPAs also rely on tax credits that are set to expire in 2022.
With UODS the utility leases space in town upon which to install their own solar panels. The property owner gets a rent check and the panels and power they produce belong to the utility. UODS is far cheaper than net metering and competitive with PPAs. UODS keeps our energy dollars in the community by leasing local roofs and parking lots (maybe schools). Because the solar resource is owned by the utility the costs and benefits are distributed equally among customers. Property owners can lease much more space for solar because they don’t have to invest the capital and are not limited to 120% of usage. The cost is that the utility has to find the capital and it takes more work to own the resource than to buy the power from someone else. But that’s why we have a municipal utility in the first place. We built a coal plant (in 1980) and transmission lines because it is cheaper than buying electricity from Xcel Energy.
So what’s the hold up? This is all pretty new. Just a few years ago solar was expensive and nobody thought it would become cheap this soon. Platte River Power Authority (PRPA, owned by Longmont, Fort Collins, Estes Park ,and Loveland) provides our electricity and is convening a study group to explore distributed solar strategies. We need to make sure that Longmont utility leaders ask the study group to include UODS.
Please email Mayor Bagley and ask him to direct the PRPA distributed energy strategy group to explore UODS.
cost savings long-term Preliminary numbers suggest that the utility could buy and maintain the solar panels, and lease roof or parking lot space, at half the rate of net metering, and without impacting electric rates or taxes!
Social equity - State law requires Longmont Utility pay solar owners the retail rate for electricity that their solar panels produce. This is called net metering. It is a great deal for people who can afford solar because net metering will pay about 100% profit margin over the life of the panels. The panels pay for themselves in under 15 years and last about 30 years. The problem is those of us without solar panels are paying the profit margin to those who can afford solar panels. That amounts to a regressive tax.
Additionally, as more people go solar there are fewer of us to pay them. At some point the scheme is not financially sustainable and breaks down. To offset this problem Longmont charges a monthly fee to solar owners. The problem is the fee artificially limits solar potential (and it may break state law and cost the City millions in a law suit).
Environment responsibility - Some people (including Councilwoman Marcia Martin) say forget about rooftop and parking lot solar. It is far easier to put solar panels on fields and undeveloped lands so let’s just do that. Longmont may have about 1.5 square miles of rooftops and parking lots that could host solar panels. That’s 1.5 square miles that doesn’t have to be industrialized to provide solar power. Land that could be used for future affordable housing, or agriculture, or open space. We may have enough rooftop and parking lot space to solarize our entire electric needs!
Local economy - What school couldn’t use a couple thousand dollars per month? If they lease their roof through UODS then they might need fewer tax dollars. If a strip malls can leasing the parking lot for solar then maybe they can reduce rents for tenants. That could keep local retailers in business in an economic downturn. The alternative to UODS that Councilperson Martin advocates is buying solar power from out of town investment groups and our non-profit utility pays for their profits. Leasing local roofs and parking lots keeps our energy dollars in our community.
UODS presents a solution because the utility does not buy electricity from solar owners at the retail rate. Instead the utility owns the solar panels and simply leases the space upon which to put the them. The cost to own and maintain the panels is less than the current wholesale rate for electricity. The difference between the wholesale rate and the cost to own the panels is the amount that Longmont can pay to lease space without impacting our electric bills.
For example: IF Longmont can lease a high school roof and put 1 MW of solar on that roof (about enough to power 160 homes) they can afford to pay that school a few thousand dollars per month without exceeding the current wholesale cost for electricity. We need Longmont Utility to run actual modeling and site specifics to determine an accurate lease payment, and that is what we are asking them to do.
We like UODS for a few reasons:
Social equity - UODS costs and benefits are spread equally among rate payers. Property owners are compensated fairly for leasing their space (not subsidized through solar sales).
Keeping dollars local - Instead of buying electricity from