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

Update:  January 11th, 2014

Visit our new site:  


Late in 2013, we finished installing our first municipal solar project for the wonderful community of Monona, Wisconsin.  This project was funded by one individual but the whole community is involved in supporting and ultimately taking full ownership of this project. 

July 28, 2011
 
Hello Community Solar Fans!
I know it's been a long time, but I've got some urgent news to relay to you all.
 
Remember how we originally tried to see if we could organize a COMMUNITY SOLAR COOPERATIVE in order to set up a group-financed project for solar power?  Well, one of the major stumbling blocks has always been SECURITIES registration requirements.  There was a time (not too long ago) when cooperatives had been exempt from some securities requirements for offering or selling securities (a piece of the pie, so to speak).  This all changed with an inadvertent bill in 2009.  Email me for a copy of this proposed bill (solarconnections@gmail.com)
 
A Republican (any port in a storm) legislator by the name of Al Ott (R-Forest Junction) is sponsoring legislation to reverse the changes that disqualified cooperatives from the SEC exemption status that had previously been enjoyed for decades.
 
Please contact your state represenatives (assembly and senate) to encourage passage of this bill.  We want favorable regulatory policies that are not serving only the elite corporate classes (like those who pass along out-of-state ALEC legislation) but which serve farmer's coops, food coops, housing coops, buying coops, and yes, solar coops.
 
On that note, I am meeting with potential host sites for a community solar project this fall.  Let me know if you might be interested in learning more.
 
Oh, and please check out my blog and twitter accounts below.
 
Sunny Regards!
 
Kurt Reinhold
Solar Connections, LLC
3509 Lucia Crest
Madison, WI  53705
 
Cell (608) 957-6801
 
 
 
November 8, 2010 Update:
For those of you interested in the 30% Cash Grant / Investment Tax Credit for Solar (and other qualifying energy investments), see the following US Treasury link:  http://www.ustreas.gov/recovery/1603.shtml
 
Did you know that if a business invests in a solar array right now, that the upfront payments will buy you 40+ years of clean green electricity for about 4 cents per kilowatt-hour.  Chances are, you are already paying twice or three times that much for your grid electricity.  Contact Solarconnections@gmail.com to find out more!
 
 
September 28th, 2010 update:
Hope all you solar enthusiasts check out some of the thousands of Solar Open Houses and open businesses that will be showcasing solar technologies and other smart energy products and practices this Saturday, October 2nd.  Check out www.the-mrea.org for sites in Wisconsin.
 
Check out also a smart article on a much-needed change to our tax code that should help improve ACCESS to the solar investment tax credit -- It is about the inability for small investors in a business enterprise to take advantage of Pass-Through credits (for instance in a LLC or through passive ownership of a 3rd party array) -- Here's the link:
 
Community Solar Wisconsin is still in development phase; but, we are poised to start a pilot project.  Please contact Kurt to learn more about this project and how you might be able to get involved.  Solarconnections@gmail.com
 
We'll be seeing you!
 
____________________________
 
 July 27th, 2010 Update:
Hello Community Solar Fans!  It's been a long hot summer so far and it's not even August yet.  I will post our household's solar production stats soon; but, for now, I just want to invite anyone interested in attending a talk I'm giving on Thursday, August 5th at the Goodman Atwood Community Center on Waubesa Street here in Madison at 3:30pm.  It is being coordinated wtih Sustainable Atwood's hosting of this year's Madison Non-Profit Day -- For more information, see their website at --
 Hope to see you there!
Kurt
 
 
May 6th, 2010 Update:
  • Closing in on solid ground on which to build this business plan!
  • Thanks to Blue Tree Strategies for help with a Revolving Loan Fund analyzing tool.
  • Thanks to Emily Allred for help with Fund Management information.
  • Thanks to Twink Jan-MacMahon for help in organizing meetings!
  • Thanks to Gretchen Cleveland and Sverre Roang for legal assistance
  • Thanks to Anne Reynolds for helping network w/ co-op/501-c3 experts.
NEXT INFORMATIONAL MEETING -- Thursday, May 27th
        - Plymouth Congregational Church
          2401 Atwood Avenue
          Madison, WI  53705
 
        - Potluck (bring some eats) at 6pm
        - Solar Presentation and Q&A at 7pm
 
    Hope to see you there!  Stay tuned for other dates and times in June!!!
 
 
March 15th, 2010 Update:
 
  • Finished grant project.  see Feb 13th update below;
  • Goodman Center Meeting to be held in May;
  • Creating "Solar Loan" calculator for a cooperative business plan based on community members capitalizing a fund that would make loans specifically for solar power projects.  Lenders could benefit from greening their community by supporting solar through making loans to the cooperative who would in turn make loans to others who want to do solar but who need the financial backing to make it happen.  Powerpoint on this to be delivered in May.
  • Seeking volunteers to help with:
    • Website development
    • Business Plan Analysis
    • Member Recruitment
  • Contact Kurt at: solarconnections@gmail.com
Updated Timeline:
March-April 2010:   Test business plan assumptions
April-May 2010:      Form Steering Committee for future
                              membership organization (co-op or 501-c3).
May-June 2010:      Membership dues to apply to start-up
                               expenses for fund development;
June-July 2010:      Start fund-raising for project 1.
July-August 2010:    Finalize host-site for project 1.
Sept-Oct 2010:        First "Solar Loan" applied to
                               project 1, hopefully to be developed in
                               fall of 2010.
Nov-December 2010:  Apply lessons learned from 1st project
                                and start over again with project 2.
2011-2016:              Repeat.
 
see CSW BLUEPRINT Page for more information.
 
 
 
February 13th, 2010 Update:
 
Submitted the final report for the research project funded in part by a Focus on Energy business and marketing grant.  See all the documents submitted at our online group on wiserearth.org site for Community Solar Wisconsin at: http://www.wiserearth.org/group/commsolarmadison
 
See our new and ever-evolving CSW BLUEPRINT page!
 
 
January 10th, 2010 Update:
 
We were awarded a grant to research legal and financing barriers to a group-owned solar project, and have been narrowing the focus for our business model.  Also, we are investigating peer-to-peer and microfinance models as a way of pooling resources to fund a community solar project.  Will work on final report this week for the Focus on Energy grant and make available all the products of this research.
 
 
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.
 
 
 
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; but, we will investigate the benefits for multiple groups or communities to share the same business structure.
    • 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 for the first 10 years of the interconnection with the utility.  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, 2009, we held our first meeting.  See the Updates to the left for more information. 

 

The Solar "Cooperative" idea is to help anyone and everyone who would like to buy and install solar equipment, 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.  Although restrictive covenants preventing solar from being built are not legal, many choose to maintain a NIMBY attitude in order to not upset their neighbors.

5.  Those who do not have $10,000 or more to spend; but, who can and will spend a fraction of that to bring green electricity to the community.

 

 
 
 
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);
  • Investor-Owned Utilitiy Incentive/s -- Wisconsin's Focus on Energy Cash Rebate* for Solar:
    • up to 20% 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 .
 *The administration of the Focus on Energy program has been awarded to the Shaw Group, a Louisiana-based corporation which is heavily invested in the fossil fuel industries.  They have decided the state's investor-owned utilities cannot fund this program supporting business solar incentives, so it was discontinued in July of 2011.  Residential solar programs have been allowed to continue for a short length of time without any promise of renewing in 2012.
 
 
 
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): CSW BLUEPRINT Page
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