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Solar "Cooperative" Concept....Plan.....Reality?

September 9th, Update:
 
Waiting for reply from Focus on Energy regarding our grant application to work out the details for overcoming barriers to maximize the feasibility of our type of group-funded solar project. 
Met with David Jenkins today (along with Anne Reynolds), and learned a whole lot more about how cooperatives work (and don't work) in Wisconsin.  This will be valuable information when we get to the point of narrowing the scope of research for our legal and accounting team.
 
By the way, I have officially invited both the legal and accounting team to be part of our core "Advisory Team".  We all have a vested interest in overcoming barriers to adopting renewable energy, and to improving access to investing in renewable energy.  Community Solar Wisconsin will be a huge help to bringing motivated small investors into the larger tent of renewable energy "ownership".  If the public service commission and the state of wisconsin has made our state a "Net Metering" state, this will help bring private ownership of renewable energy projects to more and more small investors.
 
We will hold another meeting within the next month to "Beta Test" 2 or 3 different scenarios for investing in these group projects.
 
Also, there will a pot-luck solar social to be held at the residence of yours truly (Kurt Reinhold) at 3509 Lucia Crest in Madison (near Hilldale) on Saturday, October 3rd, from 4 to 6 p.m.  This is the national Solar Tour day, so stop in early to see our solar house (and plug-in electric Prius, our electric moped, and green remodelling project/s), and come later to socialize with others from our group and the neighborhood.  Stay tuned!  See Community Solar Wisconsin on www.wiserearth.org for more information.
 
 
 
July 11th Update:
1.  Advisory Team includes Anne Reynolds, Eric Sundquist, and Larry Walker.
2.  Kurt to apply for Focus on Energy Grant to help tackle complicated legal questions and to help better shape our business plan;
3.  Asking PrairieFire Biofuels Education Foundation to be a fiscal agent for this grant.
4.  Approaching MGE this week with proposal for solar-charging station for electric vehicles -- will try to test the waters for a possible partnership with Community Solar.
5.  New idea is to have an institutional investor/s, a municipality (bond), or a utility buy the original photovoltaic array, and then sell "Shares" to the public.  See the following link for a similar project from Ashland, Oregon - - click HERE to open new window for this link.
 
 
June 25th Update:
1.  Met on June 23rd with approximately 11 interested folks from the community AND about 1/2 of whom have met for the second or third time now.
2.  We re-introduced the general motivation behind the group's mission and some possible models of organization.
3.  Discussed some legal challenges we hope to address through a focus on energy grant with some local legal expert/s.
4.  We are starting to form an "Advisory Team" to help steer the formation of a viable business plan and to inform the growth of this group's ideas into action.
5.  See the online group for more information:
6. Please email Kurt if you want to receive weekly email updates at
 
 
June 6th Update:
1. Started a new internet group as a forum for our "Co-op" development
    Go to:  http://www.wiserearth.org/group/commsolarmadison  to view and participate.  If you received an
    email invitation, click on the JOIN button (it's faster, I think).
2.  Will start a grant application to help us ferret out solutions to the legal barriers to group ownership of off-site solar projects.  Please join the forum above and offer your input.  Thank you!  :)
 
June 2nd Update:
1.  Next meeting?  please email solarconnections@gmail.com for your preference on when to meet next.  I'm hoping for Tuesday, June 23rd.
2.  Assignments.  If you have an idea about how to best structure this "3rd-Party Ownership" model, whether it is as a COOPERATIVE or as a LLC, or some other structure, please flesh out your ideas and share them with Kurt during the month of June, before the next meeting.  thank you.
3.  Important considerations.  There are documents floating around about these subjects, and I wanted to make them available to more of our group participants.
    SEE http://www.wiserearth.org/group/commsolarmadison  for many interesting documents.
    SEE LINKS page for some good links on solar topics and local solar businesses.
 
 
May 28th Update:
1.  Meeting tonight at 7pm Goodman Center;
2.  Interesting powerpoint on Solar Economics for Buildings to be found at this link: 
3.  List of Questions for tonight's meeting
    a.  To explore viability of a COOPERATIVE structure for our group (as opposed to a LLC, etc);
    b.   To determine HOW to structure relationship in order to allow INVESTORS to receive ITC;
    c.  To determine HOW to structure relationship in order to maximize use of MACRS (Modified Accelerated
        Cost Recovery System);
    d.  Whether to use a PPA model or a solar lease model?
    e.  What are the EXPENSES for this venture?  What is the minimum necessary tinvestment (beyond the solar equipment) in order to conduct this business?  (the following list was borrowed as potential costs...)
           i) Liability Insurance Premiums
            $2M per occurrence general liability policy        (MG&E requires $300,000 liability...?)
            $13,000 to $25,000 per year  (??)
        ii)  Attorney Fees
        iii)  Income Tax on Rebate
        iv)  Property Taxes
                $900 per kW assessment basis for PPA’s only
                    ▪ defined as utility’s by Colorado Division of Property Taxation  (what about Wisconsin?)
                Local assessed for all others projects
        v)  Interest expense for debt financing
        vi)  O&M Costs
            *Inverter replacement in year X
            *Service Agreements with Installer
            *Subscription fees for monitoring solution                
 
(Expenses list taken fro Namaste Solar Electric, Colorado.  See web address -- 
 
 
 

Overview of May 4th Meeting (not officially minutes, per se)

  • Brief Introductory words by Gil Halsted
  • Long-Winded Introduction to Solar Economics by Kurt Reinhold
    • Power Point available by request (to be posted online soon)
  • Brief Presentation by Burke O’Neal from Full Spectrum Solar.
  • Question-and-Answer Session with group (paraphrasing here):
    • How would a solar cooperative work?  Are extension cords involved?
      • Answer:  Since we are all connected to the electrical grid, any energy we produce that is also connected to the grid could be considered to OFFSET each of our own electrical consumption to a degree relating to each member-investor’s equity in a large solar array.  It doesn’t matter where the solar power is generated, as long as you “own” that generating capacity, you are helping to make the grid electricity CLEANER and GREENER. 
(Caveat:  if we participate in the utility-sponsored Green Partners Program and enroll in the Advanced Renewable Tariff (ART) program, we may not OWN the rights to the “Green Tags” or the Renewable Energy Credit (REC), for we could be “selling” those rights to the utility, who can use it to count toward the Renewable Portfolio Standard mandated by the State (and perhaps, eventually, by the Feds)).
 
    • Will each solar project be a separate business entity?
      • Answer:  not necessarily.  There should be an advantage for investor/members to benefit from future projects, assuming they will be more ‘profitable’.
    • What about the effect of changing technologies with respect to solar?  Won’t a system we buy today be obsolete in just a few years?
      • Answer:  No.  Burke replied that he is 99% sure we will be able to get a replacement INVERTER at 10 years from now that will be compatible to today’s MODULES.
      • Answer:  In terms of investment return, our costs are more or less FIXED at the time of the original purchase.  Since we can with good reliability predict the PERFORMANCE of our solar array at least 25 years out (most modules have a 25 year warrantee), we can base pricing and return-on-investment (ROI) predictions on very good conservative data.  In terms of less conservative (more optimistic) outlooks, the cost of fossil fuel energy in the future will only increase the savings using solar, and decrease the time required to see a ROI.
 
GOOD NEWS!!!!!! 
Thank you for reading this far down the page.  Now you will be rewarded with some excellent good news.

Jeffrey Ford of Madison Gas and Electric confirmed for us last week that MGE has now been given the go-ahead to expand their Clean Power Partner program from 300 kilowatts to 1 megawatt.  That means a greater than 300% increase in the capacity that MGE is willing to offer for the Advanced Renewable Tariff price of $.25 per kilowatt-hour to participating customers.  This move will hopefully pave the way for a much larger increase in renewable energy projects being developed not only in the MG&E territory, but also in the whole state of Wisconsin in general. 

 

What is an Advanced Renewable Tariff, you ask?  Here is a link to an excellent article explaining the history and the rationale for such an instrument.  Link.   

 
 

More information on the MG&E Clean Power Partner program?  Click here.

 
  
 
Summary of Incentives available to maximize our effectiveness in promoting renewable energy:
  • Federal Investment Tax Credit (ITC) -- 30% (no cap) of project costs during year of purchase (refund from that year's tax return);
  • State Incentive/s -- Wisconsin's Focus on Energy Cash Rebate
    • up to 25% for taxable business or residential systems
    • up to 35% for tax exempt business costs for buying and installing solar
  • Advanced Renewable Tariff (ART) -- Currently, most public utilities in Wisconsin offer $.25 per kilowatt-hour for all electricity produced for the first 10 years.
  • Rural Energy for America Program (REAP) -- for qualified rural customers (agricultural or small businesses) up to 25% of the cost for a renewable energy system can be offset in the form of a grant or a loan.  This is in addition to the 30% federal ITC.
  • Low-Income Housing Tax Credit (LIHTC) --  may involve 3rd-Party investment in developing or remodeling property and/or replacing roof, along with the installation of solar energy equipment.  See U.S. Housing and Urban Development, www.hud.gov .
 
 
Wisconsin's Focus on Energy Cash Rebate Program for Solar.  Click here for details.
 
REAP = Rural Energy for America Program.  Click here for details.
 
 Advanced Renewable Tariff (ART):  More information?  Click on this Link.   
 
 
Questions?  inquire at Solarconnections@gmail.com
 

 

BACKGROUND

Gil Halsted and Stefania Sani wanted to pursue a second solar installation on the roof or gantry of the Goodman Community Center in Madison, Wisconsin.  In brainstorming different ways to fund this idea with Kurt Reinhold, the notion of a solar cooperative came up.  On May 4th, we held our first meeting open to the public.  See the following Update for more information. 

 

 

The Solar "Cooperative" idea is to help anyone and everyone who would like to invest in and own a piece of solar power, but who are prevented from doing so for any one (or more) of the following reasons:

                                                                                       

1.  Too much shading on your property;

2.  Poor sun exposure (lack of south-facing roof or space to mount panels);

3.  Renters whose landowner/s do not want to allow an installation on their

     property;

4.  Condominium owners or Neighborhoods where there are rules against

    the type of structures that can be erected on the outside of their homes

    due to "common space" restrictions.

5.  Those who do not have $10,000 or more to own a project, but who would

      like to buy smaller "shares" of a larger solar project.

 

 
 
For more information on the USDA Rural Energy for America program, click here.
 
To see if your "Rural" property qualifies under REAP, click here.
 
For more information on Clean Renewable Energy Bonds (CREBs) through the Treasury, click here.
 
Subpages (1): Third-Party Solar Partnership