When you pay for the energy you use, where does your money go? Chances are it goes out of town, out of state, or even out of the country. Wouldn’t it be great if you could keep your energy dollars close to home, help create new local jobs and business opportunities, and provide greater energy security and price stability? That’s where community energy comes in. A growing number of people are discovering the many benefits of keeping their energy dollars circulating in their local economies.
Community energy reflects the idea that most of the power consumed in a locality should come from — and be owned and controlled by — the locality itself. Community energy initiatives based on local renewable resources are now emerging across the country. While these projects take a variety of forms, one common element is local ownership. Community energy encourages new ways of imagining our relationship with resources: Think local empowerment.
This trend is especially apparent in the way the national electric grid is functioning as the balance of power shifts to communities. Today’s grid is being transformed from a one-way flow of electricity out of large, centrally located generation plants to a two-way flow that includes many widely distributed renewable energy sources, such as wind, solar, hydropower and biogas. This transition to renewables is opening up new possibilities for community energy initiatives, such as the Harvard Solar Garden and the Piedmont Biofuels cooperative (keep reading for more information on these two case studies).
Starting a Community Energy Project
So, how exactly do you set up a local community energy project? You can choose from many possible financial and ownership strategies, and selecting the right one will depend on a wide range of local issues. Some projects focus on a particular technology, such as solar hot water (as with the Plymouth Area Renewable Energy Initiative in New Hampshire) or biofuels. Others involve a larger enterprise, such as a wind farm or photovoltaic (PV) installation. There is no “right way,” just the way that works best for your group.
While community energy projects can tap almost any local renewable power sources, solar electric is one of the fastest-growing sectors thanks to the dramatic decrease of the cost of PV panels in recent years. Another factor has been the enactment of “group net metering” laws in some states, which allow customers served by the same utility to combine their meters as a single billing entity — thereby granting apartment dwellers the ability to participate in community energy projects. Another advantage of group net metering is that it offers a lot of flexibility for finding a good site to install, say, a large solar array. More and more co-ops, schools, municipalities and nonprofits are navigating their way through the financial, legal and technical aspects of a successful group net-metered solar project. A recent success story is that of Harvard, Mass.
The Harvard Solar Garden
Harvard, a town of 6,000 in central Massachusetts, participated in the Solarize Mass program in 2011, which resulted in the installation of 400 kilowatts (kw) of solar PV panels, serving 75 households in the community. Quite a few residents and businesses couldn’t participate, however, because of site-specific limitations. This roadblock spawned the idea of a separate shared-ownership energy-generation facility — the Harvard Solar Garden.
“We had 35 residents and three business owners who were ready to write checks if we could build a community solar installation,” says Eric Broadbent, communications coordinator for the project. Broadbent and other residents took on the challenge of developing this member-owned community solar project — the first of its kind in the state. They applied for and received several state and federal grants, but had to overcome a number of obstacles — including laws and regulations concerning zoning and taxation — to move forward. Luckily, the project had strong grass-roots backing. “The local people wanted it, so every time we had to get past some hurdle, the community rallied in our support,” Broadbent says.
The project, organized as a two-tiered LLC (limited liability companies offer legal protection to a project’s owners/investors), made use of state tax credits, Commonwealth Solar II grants, Solar Renewable Energy Credits (SRECs), Section 1603 Program federal grants (no longer available), and federal investment tax credits. When the first phase went live in June 2014, the number of participants in the Harvard Solar Garden had grown to 47, and the energy generated by the array had reached 294 kw. A second phase is in its final stages.
This Pittsboro-based cooperative has been leading the grass-roots sustainability movement in North Carolina by encouraging the use of locally produced biofuels made from waste fats and greases and used cooking oil. Piedmont Biofuels sells directly to its member-owners, who collectively own about 450 biodiesel-fueled vehicles. Members can buy biodiesel from the co-op or learn how to make their own through an education program. The co-op has built dozens of small-scale fuel plants and runs a highly respected research facility. Piedmont Biofuels offers consultation services on everything it does.
Founded in 2003, the co-op made the transition from backyard biodiesel producer to small industrial producer (with a new, million-gallon-per-year facility) in 2006. Piedmont Biofuels’ strengths are its diversification — selling biofuels, consulting, and designing and building small biodiesel reactors — and its local focus. “We’re not interested in being the next fuel monopoly,” says co-founder Lyle Estill. “We’re just trying to fuel our community.”
Keys to the Success of a Community Energy Project
While every place and project will be different, one element is central to all successful community energy initiatives: a small group of dedicated, local citizens who are charged up by the project. This certainly was the case with the Harvard Solar Garden. “It was a combination of a few key individuals and broad local support from the community for renewable energy,” Broadbent says. “Having businesses, residents and state agencies all working together on a project like this can produce amazing results.”
The development of more community energy projects is often held up by the sheer cost and complexity of creating the financial and legal structures necessary for such ventures. One promising development is the creation of legal and financial models that are open-source — that is, available to anyone. Joy Hughes, founder of the Solar Gardens Institute, a Colorado-based organization that helps communities pool their resources to build solar arrays, agrees. “Open-source information makes it possible for a nonprofit, a small utility or a municipality to just go ahead and do a project for itself,” Hughes says.
For advice on how to develop a localized energy endeavor, see "Community Energy Resources," below. I’ve tackled the intricacies at length in my book Power from the People.
Core Principles of Community Energy
Community ownership, community benefit. Precedence is given to the community’s needs, including the health of the local economy and the environment.
Renewable, local and distributed. Renewable energy sources are ideal for building energy security because they won’t run out, often are available across a wide geographic area, and pass on a cleaner corner of the world to future generations.
Adaptive resilience. Small, local projects are less vulnerable to external shocks, such as price spikes, and are better able to adapt to changing conditions.
Conservation first. With the impending demise of cheap and abundant fossil fuels, reducing the overall amount of energy we consume is paramount.
Community Energy Resources
To read more about renewable, community energy, order either of these two books by this article’s author, Greg Pahl:
1. Community Wind, American Wind Energy Association
• A good introduction to the basics of community wind power that offers case studies from across the nation, presents project models, and reviews tax policies and incentives.
2. A Guide to Community Solar, National Renewable Energy Lab
• A comprehensive guide to developing community solar projects that, although a bit dated (from 2010), offers a lot of useful information.
• This group works to establish a clean, diverse and affordable Northwest energy system based on efficient use of renewable resources with maximum local control.
Greg Pahl has written extensively on energy security in a post-carbon world. His environmental activism has included a founding membership in the Vermont Biofuels Association, and living off-grid with a wind turbine.