A new contract between Kalamazoo, Michigan, and utility Consumers Energy signals a change in direction for the city’s clean energy strategy as it seeks to become carbon neutral by 2040. 

Solar was seen as a pillar of the city’s plans when it declared a climate emergency in 2019 and set a goal of zeroing out carbon emissions by 2040. After spending years exploring its options, though, the Michigan city is tempering a vision for rooftop solar in favor of large, more distant solar projects built and owned by the utility. It’s not alone either, with Grand Rapids, Milwaukee, Muskegon and other cities taking a similar approach.

“Folks want to see solar panels on parking lots and buildings, but there’s no way as a city we can accomplish our net-zero buildings just putting solar panels on a roof,” said Justin Gish, Kalamazoo’s sustainability planner. “Working with the utility seemed to make the most sense.” 

Initially there was skepticism, Gish said — “environmentalists tend to not trust utilities and large corporate entities” — but the math just didn’t work out for going it alone with rooftop solar.

The city’s largest power user, the wastewater treatment pumping station, has a roof of only 225 square feet. Kalamazoo’s largest city-owned roof, at the public service station, is 26,000 square feet. Spending an estimated $750,000 to cover that with solar would only provide 14% of the power the city uses annually — a financial “non-starter,” he said.

So the city decided to partner with Consumers Energy, joining a solar subscription program wherein Kalamazoo will tell Consumers how much solar energy it wants, starting in 2028, and the utility will use funds from its subscription fee to construct new solar farms, like a 250-megawatt project Consumers is building in Muskegon. 

Under the 20-year contract, Kalamazoo will pay a set rate of 15.8 cents per kilowatt-hour (kWh) — 6.4 cents more than what it currently pays — for 43 million kWh of solar power per year. If electricity market rates rise, the city will save money, and Kalamazoo receives Renewable Energy Credits (RECs) to help meet its energy goals. 

The subscription is expected to eliminate about 80% of Kalamazoo’s emissions from electricity, Gish said. The electricity used to power streetlights and traffic signals couldn’t be covered since it is not metered. As the city acquires more electric vehicles — it currently has two — electricity demand may increase, but city leaders hope to offset any increases by improving energy efficiency of city buildings.  

Consumers Energy spokesperson Matt Johnson said the company relies “in part” on funds from customers specifically to build solar and considers it a better deal for cities than building it themselves, “which would be more costly for them, and they have to do their own maintenance.”  

“We can do it in a more cost-effective way, we maintain it, they’re helping us fund it and do it in the right way, and those benefits get passed on to arguably everybody,” Johnson said. 

Grand Rapids, Michigan, joined the subscription program at the same time as Kalamazoo. Corporate customers including 7-Eleven, Walmart and General Motors are part of the same Consumers Energy solar subscription program, as is the state of Michigan.

Costs and benefits

“There’s a growing movement of cities trying to figure out solar — ‘Yes we want to do this, it could save us money over time, but the cost is prohibitive,’” said John Farrell, co-director of the Institute for Local Self-Reliance. 

Until the Inflation Reduction Act, cities couldn’t directly access federal tax credits. The direct-pay incentives under the IRA have simplified financing, Farrell said, but cities still face other financial and logistical barriers, such as whether they have sufficient rooftop space.  

Advocates acknowledge deals with utilities may be the most practical way for budget-strapped cities to move the needle on clean energy, but they emphasize that cities should also strive to develop their own solar and question whether utilities should charge more for clean power that is increasingly a cheaper option than fossil fuels.

“Our position is rooftop and distributed generation is best — it’s best for the customers, in this case the cities; it’s best for the grid because you’re putting those resources directly on the grid where it’s needed most; and it’s best for the planet because it can deploy a lot faster,” said John Delurey, Midwest deputy director of the advocacy group Vote Solar. “I believe customers in general and perhaps cities in particular should exhaust all resources and opportunities for distributed generation before they start to explore utility-scale resources. It’s the lowest hanging fruit and very likely to provide the most bang for their buck.”

Utility-scale solar is more cost-effective per kilowatt, but Delurey notes that when a public building is large enough for solar, “you are putting that generation directly on load, you’re consuming onsite. Anything that is concurrent consumption or paired with a battery, you are getting the full retail value of that energy. That is a feature you can’t really beat no matter how good the contract is with some utility-scale projects that are farther away.”

Delurey also noted that Michigan law mandates all energy be from clean sources by 2040; and 50% by 2030. That means Consumers needs to be building or buying renewable power, whether or not customers pay extra for it. 

“So there are diminishing returns (to a subscription deal) at that point,” Delurey said. “You better be getting a price benefit because the power on their grid would be clean anyways.” 

“Some folks are asking ‘Why do anything now? Just wait until Consumers cleans up the grid,’” Gish acknowledged. “But our purchase shows we have skin in the game.” 

A complement to rooftop

In 2009, Milwaukee adopted a goal of powering 25% of city operations — excluding waterworks — with solar by 2025. The city’s Climate and Equity Plan adopted in 2023 also enshrined that goal. 

For a decade, Milwaukee has been battling We Energies over the city’s plan to install rooftop solar on City Hall and other buildings through a third-party owner, Eagle Point Solar. The city sought the arrangement — common in many states — to tap federal tax incentives that a nonprofit public entity couldn’t reap. But We Energies argued that third party ownership would mean Eagle Point would be acting as a utility and infringing on We Energies’ territory. A lawsuit over Milwaukee’s plans with Eagle Point is still pending.

In 2018 in Milwaukee, We Energies launched a pilot solar program known by critics as “rent a roof,” in which the utility leased rooftop space for its own solar arrays. Advocates and Milwaukee officials opposed the program, arguing that it encouraged the utility to suppress the private market or publicly owned solar. In 2023, the state Public Service Commission denied the utility’s request to expand the program.

Wisconsin’s Citizens Utility Board opposed the rent-a-roof arrangement since it passed costs it viewed as unfair on to ratepayers. But Wisconsin CUB Executive Director Tom Content said the city’s current partnership with We Energies is different since it is just the city, not ratepayers, footing the cost for solar that helps the city meet its goals.

Milwaukee is paying about $84,000 extra per year for We Energies to build solar farms on a city landfill near the airport and outside the city limits in the town of Caledonia. The deal includes a requirement that We Energies hire underemployed or unemployed Milwaukee residents.

The Caledonia project is nearly complete and will provide over 11 million kWh of energy annually, “enough to make 57 municipal police stations, fire stations and health clinics 100% renewable electricity,” said Milwaukee Environmental Collaboration Office director Erick Shambarger. 

The landfill project is slated to break ground in 2025. The two arrays will total 11 MW and provide enough power for 83 city buildings, including City Hall – where Milwaukee had hoped to do the rooftop array with Eagle Point. 

Meanwhile, Milwaukee is building its own rooftop solar on the Martin Luther King Jr. library and later other public buildings, and Shambarger said the city will apply for direct pay tax credits made possible by the Inflation Reduction Act — basically eliminating the need for a third-party agreement.

“Utility-scale is the complement to rooftop,” said Shambarger. “They own it and maintain it, we get the RECs. It worked out pretty well. If you think about it from a big picture standpoint, to now have the utility offer a big customer like the city an option to source their power from renewable energy — that didn’t exist five years ago. If you were a big customer in Wisconsin five years ago, you really had no option except for buying RECs from who knows where. We worked hard with them to make sure we could see our renewable energy being built.”

We Energies already owns a smaller 2.25 MW solar farm on the same landfill, under a similar arrangement. Building solar on the landfill is less efficient than other types of land since special mounting is needed to avoid puncturing the landfill’s clay cap, and the panels can’t turn to follow the sun. But Shambarger said the sacrifice is worth it to have solar within the city limits, on land useful for little else.

“We do think it’s important to have some of this where people can see it and understand it,” he said. “We also have the workforce requirements, it’s nice to have it close to home for our local workers.”

Madison is also pursuing a mix of city-owned distributed solar and utility-scale partnerships. 

On Earth Day 2024, Madison announced it has installed 2 MW of solar on 38 city rooftops. But a utility-scale solar partnership with utility MGE is also crucial to the goal of 100% clean energy for city operations by 2030. Through MGE’s Renewable Energy Rider program, Madison helped pay for the 8 MW Hermsdorf Solar Fields on a city landfill, with 5 MW devoted to city operations and 3 MW devoted to the school district. The 53-acre project went online in 2022.

Farrell said such “all of the above” approaches are ideal.

“The lesson we’ve seen generally is the more any entity can directly own the solar project, the more financial benefit you’ll get,” he said. “Ownership comes with privileges, and with risks. 

“Energy is in addition to a lot of other challenging issues that cities have to work on. The gold standard is solar on a couple public buildings with battery storage, so these are resiliency places if the grid goes down.”

A version of this article was first published by Energy News Network and is republished here under a Creative Commons license.

In Michigan and Wisconsin, cities are finding rooftops alone may not achieve solar energy goals is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

A new study on behalf of Milliken has identified the top U.S. states for sustainable energy production. The rapid rise of the sustainable energy sector worldwide has been one of the most important technological and economic stories of recent years. Continued urgency to mitigate the impact of climate change has spurred governments and companies to speed the transition …

The post States With the Most Businesses Focused on Sustainable Energy appeared first on Alternative Energy HQ.

Racine Mayor Cory Mason, photographed in the outdoor, rooftop lounge at the Hotel Verdant in Downtown Racine. (Wisconsin Examiner photo)

For Racine Mayor Corey Mason, a small park studded with boulders on the shore of Lake Michigan just south of the city’s downtown is an object lesson on the impact of climate change.

In January 2020, a 100-year storm demolished at least one-third of Sam Myers Park. “If you’d been here at the time, you would have seen a lot of these boulders on the street,” Mason said at a morning press conference on the park grounds last week.

“Climate change, if we don’t address it, is expensive,” Mason said. “We are seeing more frequent and more powerful storms, and the cost of upsizing our wastewater pipes or making a more resilient and powerful lakefront becomes an important investment that we have to make.”

While the Federal Emergency Management Agency (FEMA) paid for the restoration, the park served as a backdrop last week for Mason to describe how the city has benefitted from other federal programs: three signature laws passed by Congress and signed by  President Joe Biden over the last four years.

Between the American Rescue Plan Act (ARPA), the bipartisan infrastructure law in 2021 and the Inflation Reduction Act in 2022, Racine has gotten a formidable amount of federal support.

“Those three together are sort of the holy trinity of federal legislation,” Mason said in an interview. “They’ve just been so transformational for us. I don’t know how we’d have gotten through Covid without them.”

ARPA, the pandemic relief program that was enacted in the first three months of Biden’s term, funded incentives the city used to encourage residents to get the first vaccine for COVID-19, which was just becoming available then. The city’s ARPA allotment also helped it fund programs for youth employment and adult high school, Mason said.

Some $38 million in ARPA money — $20 million from the state and $18 million from the city’s direct allotment — are helping to finance a new community and health center in Racine’s Lincoln-King neighborhood just west of Downtown.

A $9.8 million infusion from the bipartisan infrastructure law will cover more than 70% of design and construction costs to repave a stretch of one of Racine’s main north-south arteries and put new concrete on three other streets. Some of that money is also covering 80% of the cost of bridge repairs and additional street repairs.

In the coming year, Mason said, the law will fund Racine’s first “smart street” project — reconfiguring streets to be more walkable, adding bike lanes and curb bump-out features that require drivers to slow down “instead of four big lanes where people drive in as fast as they can in each direction.”

And the mayor singles out federal support for strong sustainability measures in the city. The sources of those measures are climate and clean energy provisions in the infrastructure law along with the Inflation Reduction Act, which includes extensive renewable energy and energy conservation provisions.

Racine has been electrifying the city’s bus fleet. The first nine electric buses were purchased from Racine’s share of a national legal settlement with Volkswagen over allegations the automaker cheated on federal emissions tests. The city is buying four more buses, funded through the infrastructure law, at which point the bus fleet will be 40% electric.

A new solar station is planned to recharge the mass transit vehicles. Construction is expected to start in the first half of 2025, with $1.2 million of its cost paid for from ARPA.

Federal government: From uninterested to policy ally

Climate change was a priority of Mason’s from when was first elected seven years ago. He committed the city to following the Paris Climate Accords.

Former President Donald Trump was in the White House at the time and withdrew from the accords in 2017. With federal policymakers uninterested in addressing climate change, Mason said, he looked elsewhere for support.

He joined the bipartisan Climate Mayors organization, municipal chief executives concerned about what many viewed as the central environmental concern of the time. He found the group invaluable for sharing ideas and learning what could work.

“You hear people, ‘Oh, you can’t do police cars that are electric,’” Mason said. “And then you go to a conference, and here’s 12 that are using electric vehicles as police cars.”

He welcomed the sharp federal turnaround on climate policy when Biden entered the White House in 2021.

“I can’t … emphasize enough just what a transformation it has been to have real partners at the federal government,” Mason told reporters at last week’s press event. He called the infrastructure law and the Inflation Reduction Act “generational pieces of legislation.”

The city started its work on renewable energy and energy conservation several years before either of those bills were on the national agenda. Nearly 20 years ago the city installed solar cells near a municipal annex building. In 2020 it leased a 2.6 acre patch of a South Side industrial park to Wisconsin Electric Power Co. to build a solar array.

Racine has been retrofitting municipal buildings, 70 years old on average, with energy-saving measures such as better insulation, which climate experts say shouldn’t be overlooked in the quest to reduce carbon emissions.

The infrastructure law and the Inflation Reduction Act have helped turbocharge those efforts. Besides big projects like the park rehabilitation and the new electric buses, the city has also benefited from much smaller ones.

Homeowners and businesses have been eligible for tax credits to help cover the cost of what they spend on energy conservation. Nonprofit groups and municipalities can’t claim tax credits (they don’t pay taxes), but through the Inflation Reduction Act’s direct pay program, they can get the same sort of reimbursement. 

 “Having a check sent back to you for 30% to 60% of the costs is just transformational,” Mason said.

Green investment nets developer tax credits

The city hasn’t been the only beneficiary of the act.

Five years ago, Milwaukee developer Mike O’Connor paid a visit to Racine and  happened upon what had once been a major downtown department store. Unoccupied since the 1980s, the building had been partially renovated for a nonprofit, but that project was abandoned. “It was kind of a raw canvas — it was pretty well ready to go,” O’Connor said in an interview.

O’Connor and his business partner built their business, Dominion Properties, starting in the early 2000s with a focus on apartment buildings. Central to their business plan was lowering operating expenses by “chasing efficiency” on heating and related costs — adding insulation and high-efficiency furnaces.

In 2014 they went further, building a 20-unit apartment to meet high-efficiency standards known as LEED (for Leadership in Energy and Environmental Design) set by the U.S. Green Building Council.

Lenders weren’t interested in an apartment block, O’Connor’s first idea for the Racine building, and there was no market for office space, he said. Then the pair hit on the idea of a boutique hotel — a standard feature in many historic downtown neighborhoods worldwide but nonexistent in Racine.

The city welcomed the proposal, seeing it as a likely draw for tourists as well as an asset that the city’s corporate leaders would value for visiting business travelers.  

“We thought if we’re going to build, we’re going to build sustainably,” O’Connor said. “That fit well with what the mayor’s vision was.”

The 80-room Hotel Verdant opened a year ago. It’s heated with geothermal energy and boasts a rooftop full of solar panels that cover most of a green roof planted with sedum. The plant is a source of shade as well as a feature to reduce temperatures on the roof surface and in the surrounding air.

The hotel project preceded the Inflation Reduction Act, but this year the federal law provided an unexpected benefit: Dominion Properties qualified for green energy tax credits, and was able to resell the credits to a third party, O’Connor said.

Projects yet to come

More projects are on the drawing board. Racine will announce a new municipal building that meets “net-zero” standards, meaning its operation does not produce emissions that add to the carbon already going into the atmosphere. And the city’s water and wastewater utilities are on the verge of planning a major investment in reducing their greenhouse gas emissions as well.

That idea came from a Climate Mayors colleague, Mason said. But he’s counting on the federal infrastructure and the inflation act’s climate programs to make it possible.

“More than half the energy the city consumes is from our water and wastewater utilities,” Mason said. “Without something like the bipartisan infrastructure law, it’s nearly impossible to imagine — how would you get to a net-zero water and wastewater utility? But now we are seeing other communities across the country that are using the [Inflation Reduction Act] and the infrastructure law to do exactly that.”

President’s announcement Thursday is just one piece of a big clean energy picture

Racine’s climate sustainability focus extends to the city’s policy with developers — and it has courted developers who share that perspective.

When a developer proposed a new apartment complex on a riverfront corner downtown, city officials included a requirement for 5% of the parking to have electric vehicle charging stations. “And the developer was like, ‘Well, at least — we’re going to need more than that,’” Mason said.

Developers and key local employers have told him they view expanded EV charging capacity as an important amenity to draw customers or prospective employees. “We want to help incentivize that for local businesses here who want to be able to do that,” Mason said.

Even with the growing private sector interest, he sees an important role for government to play spurring the growth of renewable energy.

“I think the more we can get ahead of the market, the more we get a competitive advantage by having those resources available for people who want to live here or work here,” Mason said.

A solar energy array. Environmental groups are calling on Microsoft to bypass a planned gas-powered electricity project and instead focus exclusively on solar and wind power for its data center in Racine County. (Photo courtesy of the National Center for Appropriate Technology and the Agrisolar Clearinghouse | USDA)

A coalition of environmental and health groups has called on Microsoft to rely on clean energy generation instead of a proposed expansion of methane-fueled power for its planned Racine County data center — projected to become Wisconsin Electric’s “largest electric load.”

In an open letter to Microsoft, the groups charge that the plan underway by We Energies to build new methane gas power plants  “will push our state’s climate goals out of reach, locking us into 30 more years of fossil fuels at a time when we all know we must rapidly transition to clean energy.”

We Energies defended its plan Thursday, calling the gas plants an essential transition step as the company expands its clean energy portfolio.

Microsoft’s decision to build an artificial intelligence data center in Mount Pleasant has been highlighted as a Wisconsin economic development success story, but alongside that has come a growing awareness about the heavy demand that data centers and AI make for electric power.

In testimony to the state Public Service Commission supporting a proposed rate increase to pay for the cost of expanded methane power generation, a Microsoft consultant said the data center is expected “to become the largest electric load” served by Wisconsin Electric, the Milwaukee Business Journal reported. Wisconsin Electric is a subsidiary of We Energies.

The letter distributed Thursday by Clean Wisconsin and signed by a dozen organizations declares that if carried out, the utility’s plan will increase air pollution from nitrogen oxide, particulate matter, lead, carbon monoxide, volatile organic compounds and greenhouse gasses that contribute to climate change.

 “It’s time for Wisconsin to leave these dangerous ways to produce energy behind, not double-down on dirty fuels in the name of new technology,” the letter states.   

Instead of backing the methane power build-out, the letter urges Microsoft to embrace expanding solar and wind power in Wisconsin to meet the increased demand.

“Microsoft’s recently-announced plan to help fund a currently unspecified 250-megawatt solar project in Wisconsin is a good start, but this represents just a fraction of the data center’s energy needs,” the letter states. “There must be more.”

The letter cites Microsoft’s public claims of commitment to addressing climate change.

“This data center project represents a critical opportunity to help drive change in Wisconsin and put us on a path to clean wind and solar,” the letter states. “Microsoft knows what we all know, that the window to make meaningful progress in the fight against climate change is closing, and the decisions we make right now matter.”

In a statement Thursday responding to the letter, We Energies spokesman Brendan Conway said the new proposed natural gas generation plants were necessary to ensure reliable service as the company continues its move toward cleaner power sources.

“Now more than ever, it is critical for us to have quick-start gas plants available and running in our state for those times when intermittent renewable generation cannot meet customers’ energy needs,” Conway said. He called the gas plants “the cheapest, most reliable and lowest carbon approach to support our customers when solar and wind are not able to provide enough power.”

The proposed plants comply with EPA emission standards, Conway said. He added that We Energies continues to expand its clean energy production, spending more than $7 billion on solar, wind and battery storage capacity by 2028. The utility calculates that with those investments it will be producing four times its current output of non-carbon energy within five years.

Developed by NuGen Capital Management, the Bristol Landfill Solar Project will generate enough renewable energy to power 700+ homes and businesses.  Bristol,  R.I. (July 25, 2024)— The Bristol Landfill Solar Project, Rhode Island’s largest closed landfill solar site, is officially operational. NuGen Capital Management, LLC, the project developer, joined Toray Plastics (America), Inc. and other partners …

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