Dive Brief:
- Over 5,000 megawatts (MW) of solar could be cost-effectively installed on buildings owned by the 200 U.S. municipalities with populations of 100,000 or more if city officials can eliminate policy barriers, a new report from the Institute for Local Self Reliance (ILSR) finds. 5,000 MW equates to about 25% of 2014’s cumulative U.S. solar installed capacity,
- In New Bedford, MA, for instance, 16 MW of solar installations on municipal properties save over $6 million per year on electricity, 2.5% of the city budget, according to a new report, "Public Rooftop Revolution." Installing 70 MW of solar on municipal Kansas City buildings, the report finds, could create 1400 jobs and bring the city economy $175 million.
- The key policy solution is legal third party ownership of solar because municipalities cannot benefit from the 30% federal investment tax credit and other tax incentives central to the solar value proposition. If private third party funds pay for the solar and transfer it to cities, they get the tax benefits and the cities get the benefits of solar.
Dive Insight:
Denver's cost of solar without the federal tax credit is $0.155 per kWh but only $0.112 with it, the Denver Post notes in its writeup of the study.
The two contracts through which third party rooftop array owners transfer electricity to building occupants like municipal governments are power purchase agreements and leases. Such solar finance plans are presently available in only 23 states.
Other barriers to municipalities include the physical limits on buildings unsuitable for solar because of too much shade or not enough space, and buildings where historic or aesthetic objections block solar installation.
ILSR also reports that city officials often lack the legal expertise to negotiate solar contracts, and solar permits can commonly languish in municipal bureaucracy. The think tank notes that aggregate net metering and virtual net metering are two policies that “substantially increase the maximum possible solar capacity for a city." All but 17 states lack aggregate net metering and all but 11 lack virtual net metering.
