Dive Brief:

• Ninety-five local governments across 33 states procured 3,683 megawatts (MW) of new renewable energy generation capacity in 2020 through 143 deals, the largest amount of capacity ever added in one year, according to the latest update from the Rocky Mountain Institute (RMI) and World Resources Institute (WRI) in their Local Government Renewables Action Tracker.
• The 143 transactions, a 23% increase over 2019’s levels, could generate enough electricity to power approximately 812,000 households annually, the organizations reported. Solar was the most popular renewable energy to be procured, at 79% of all deals, followed by wind at 17% and geothermal at 4%.
• The newly shared data also show the average size of those deals increased from 14 MW in 2015 to 26 MW in 2020. Those figures included some notable city-level deals: Houston's agreement to purchase around 492 MW of off-site solar, which is the largest solar procurement and largest renewable energy deal ever signed by a local government; and Los Angeles' purchase of 331 MW of wind power, the largest wind deal ever completed at the local level.

Dive Insight:

In assessing the 2020 numbers, the organizations said the year was notable for the sheer scale and amount of deals local governments made to rely more on renewable energy sources and less on fossil fuels, moves sparked by city-level efforts to fight climate change and set ambitious emissions reduction goals. Even with the federal government re-engaged in its efforts to reduce global warming, those involved with the research said a transition to renewable energy will be led locally.

"The contributions that local governments are making to the energy transition through these deals are important, but they're also a portion of the overall progress that the country can make," said Stephen Abbott, a principal at RMI. "Personally, I take it as a positive indicator that more and more cities are becoming involved because, ultimately, the energy transition will happen at the local level."

The last year was also notable for the use of creative ways to fund renewable energy procurement, the organizations said. These included cities working with their local utilities on initiatives like green tariff programs, which help governments acquire large-scale renewables. Charlotte, NC, was one city to do just that, as it took advantage of utility Duke Energy’s green tariff program, Green Source Advantage (GSA), for a 35 MW solar project.

With utilities also having goals for renewable energy and emissions cuts, Yuning Liu, a senior associate at RMI, said utilities could be in a position to "leverage their knowledge in this field to help local governments achieve their renewable energy goals" while also helping decarbonize their own energy portfolios.

Green tariff programs and similar initiatives could take on more importance, Liu said, with city budgets expected to be stretched thin in the coming years as local leaders recover from the economic harm the pandemic caused.

While cities are getting their biggest renewable energy boosts from off-site programs, they are also turning to smaller scale, on-site renewables, not just to cut emissions but also to gain local job training, equity and social benefits.

Tatsatom Gonçalves, a research analyst in WRI's energy program, said Denver and Madison, WI, are two examples of cities using on-site renewable energy to further those equity goals. The former will allocate 20% of its solar power from future community solar projects to low- and moderate-income residents to alleviate their energy burden; the latter has trained people in the skills necessary to install solar panels, then it has added them on city property using that training scheme.

"Cities have always been interested in local benefits but are now increasingly so," RMI's Abbott said. "They're needing to balance these needs with buying lots of energy, which you have to go off-site for and out of the city's footprint. But then local projects are really well set up to maximize those local benefits in terms of the opportunities for job creation to provide local benefits to the community."