A concerted effort is growing in the Northeast to address renewable energy goals and make renewable energy accessible to everyone. Co-op Power is on the front lines, coordinating community power and constructing valuable policy resources to change legislation and the lives of many nationwide.
In this episode of the Local Energy Rules Podcast, host John Farrell speaks with Lynn Benander, president of Co-op Power, a platform for cooperative ownership of renewable energy based in the Northeast. They discuss how Co-op Power provides solar access to low-income residents of New York City and other communities and its participation in the People’s Solar Energy Fund, a partnership to make community renewable energy financially attainable everywhere in the United States.
Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.
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| Lynn Benander: | The ITC legislation, investment tax credit legislation now gives wealthy people the right to make money on their money, and ensures them a minimum return in a way that epitomizes inequity. |
| John Farrell: | How can communities receive their energy from wind and solar power while retaining ownership? Lynn Benander is President of Co-op Power, a platform for cooperative ownership of renewable energy serving customers in the Northeastern United States. We discussed how Co-op Power is providing solar access to low income residents of New York city and other communities and its partnership to make community renewable energy financing work everywhere in the United States through the People’s Solar Energy Fund. I’m John Farrell, director of the energy democracy initiative at the Institute for local self reliance. And this is local energy rules, a podcast sharing, powerful stories about local, renewable energy landscape.
Thank you so much for joining me. Very nice to be here with you. So, Lynn, I just want to start off by asking you about Co-op Power. There are lots of developers across the United States who are building solar and wind projects. What is Co-op Power though? And how is it different maybe than from many of these other kinds of developers? |
| Lynn Benander: | Well, we’re a consumer uncooperative, so the hundreds of families and the only thing more than 10,000 people who are connected to our co op make the decisions about how we move forward, what our priorities are, how we design our systems and who benefits from them. We’re structured as a network of community energy cooperatives. So we’re kind of a platform for communities to be able to, uh, implement the kinds of, um, programs and, and create the products and services and the jobs and the businesses that they want to see most in their community. So we think of ourselves as a commons that communities across New England and New York can come to in order to make good things happen in their community. |
| John Farrell: | Now, when you do like a specific project and I’m going to want to talk to you about one in New York here shortly, is that part of this broader co-op do you set up like special co-ops for each of the individual projects? How does that kind of structural work? How do these individuals say solar projects or other things work in the context of the bigger network of Co-op Power? |
| Lynn Benander: | The community energy cooperatives are the ones that originate the project ideas. Usually they say, you know, we’d like to have for the Boston Metro East community co-op could say, we want to have a solar project here or the New York city community energy coops, as we want to have this kind of solar project here. And then the community energy call-ups collaborate in order to support that development in each of the seat, community energy collapse, the community energy cost share one collapse structure. That’s why we call ourselves a platform cooperative where communities can come in and replicate the process and share all the resources with the other communities that have built those resources. We do create a special purpose entity for each of the large solar projects. And sometimes we group a whole group of small projects together to make it a big enough project in order to get it through a kind of financing that we do that can help communities own the projects later on in an affordable way. |
| John Farrell: | That’s great. And, and, you know, I would like to ask you then about a specific project, and this is one that got me very interested in setting up this conversation with you, which is a two megawatt community solar project in New York. And I think one of the things that’s really exciting about it is that so many people across the country are trying to figure out how to solve this problem, not just of how do we get access to solar, to folks who don’t have a sunny rooftop, which is a great number of people, but how do we especially address access for people who don’t have great credit scores or a home equity line of credit, or a lot of savings that would allow them to buy in. And it sounds like this project that you Co-op Power has been developing in New York helps do both of those things. Can you tell us a bit about it? |
| Lynn Benander: | Certainly the enabling legislation for solar in New York and particularly in New York City has allowed a lot of really exciting projects to happen. And the different aspects of that legislation are that one it’s really encouraged the city of New York to make public lands public properties available for solar. So many of the city’s properties were put up for bid for solar developers to come in and use those sites for solar projects. So that’s one of the things that allowed us to happen. Second is they’ve got a high rate of pay for the solar kilowatt hours that are produced. So it’s easier to make projects pencil, because you’ve got some revenue to work with. There’s good incentives also that are available to pay for solar. And the ‘centives are– incentives are larger for affordable housing, so that it makes it easier to put solar on projects that serve low income people that are located on affordable housing.
So the kinds of policies that are adopted really, um, give you the framework. You know, they, they create the, the, the field, the baseball diamond, you know, they draw in all the foul lines and then you have the space to play. So the solar policies in New York are just especially supportive of the kinds of things that we want to do. And in addition to offering solar for low income people, where in all of the solar work, we do, we are looking for opportunities to have the public, all the public money that’s going in to provide the incentives, to build solar. We want to make sure that some of that goes back to the people who are putting that incentive money in ownership opportunities for people in their communities is really important, whether that be non profit ownership or co-op ownership or municipal ownership, we think that some of those funds really should stay in public hands rather than all being shifted to private hands. So that’s the other half of the equation that we’re trying to solve. And the cooperative ownership structure allows us to really address all of those issues in a pretty exciting way. |
| John Farrell: | So when you talk about, for example, these like public ownership and public incentive money, are you then having an opportunity that you mentioned in New York city that you have, the city is providing public property for solar? Are you then also having the city as one of the owners of the project, is that kind of one way that could play out? |
| Lynn Benander: | It certainly could, but that’s not what the city was looking for. So the city has prioritized the fact that they chose us as one of the winners of a bid to build on the Brooklyn Army Terminal and to build on New York City housing authority was because we were, we were offering a structure that would bring a lot of benefit back to communities. And that was one of the criteria that they were using to evaluate the bids that they received. It was part of the RFP was to bring value to local communities. And so, because of the way that the funding moves through our projects, a good deal of it goes back to people in community. So with the Brooklyn army terminal project, I think we’re going to be able to offer a 20% discount on the electricity coming off of that array. So that’s pretty exciting. |
| John Farrell: | Yeah. Could you tell me, I love to hear just a little bit more about who are the people that are, um, benefiting from the electricity produced from the, you know, the two projects you just mentioned, the Brooklyn army terminal, the New York city housing authority, or maybe there are more than two projects. Uh, you know, housing authority obviously has a lot of property. Tell me a little bit about how those play out. Like who’s helping provide the capital to build those projects. Who’s going to benefit from them. How big are these projects? How much space are they taking out? How much energy are they going to produce? |
| Lynn Benander: | Sure. So we do have two projects. One of them is on one building the Brooklyn army terminal, and it’s a 675 kilowatt project that will provide electricity to 150 low income families in sunset park. The capital is going to come from investor and a lender, and we’re using a third party financing model called the partnership flip and Co-op Power will be the sponsor in that project. And we’ll start off with 1% ownership at the flip. Once our tax equity investor has achieved their targeted return, we’ll then have 95% ownership and be stewarding that project. And then we’ll buy out that in fester and pay off the loan and be able to bring even more benefit to the local community.
The other project we’re doing is on New York city housing authority property. It’s 1.2 megawatts of solar on 40 buildings owned by the New York City Housing Authority. The electricity will not go to the residents of those buildings because they already get their electricity from the housing authority. And so we’re going to be putting a standalone meter on those buildings and bringing that assigning that power to low income families, about 350 families who live in that area. They’re actually two of the housing projects are in Brooklyn and one of them is in East Harlem. And so people who live low income, people who live in the communities near that near those housing projects are going to be the people who are able to get the power assigned to their bills at a discount, get 15% likely off of their electric bills. And that will be financed in the same way with a tax equity investor and lender who helped to pay for the project. And then the partnership flip model takes it back into ownership by Co-op Power and stewarded there by the New York City Community Energy cooperative to fit all of those member owners, we’ll have 500 member owners of our co op, who are low income families that are receiving this electricity sometime early spring. |
| John Farrell:. | We’re going to take a short break. When we come back, I asked Lynn about how cullet power busts the barriers to community-based renewable energy. We take a dive into the challenges with tax equity and tax credits, and we find out how U.S. Energy this can scale up.
Hey, thanks for listening to local energy rules. If you’ve made it this far, you’re obviously a fan and we could use your help for just two minutes. As you’ve probably noticed, we don’t have any corporate sponsors or ads for any of our podcasts. The reason is that our mission at ILSR is to reinvigorate democracy by decentralizing economic power. Instead, we rely on you, our listeners, your donations, not only underwrite this podcast, but also help us produce all of the research and resources that we make available on our website and all of the technical assistance we provide to grassroots organizations every year. ILSR, our small staff helps hundreds of communities, challenge monopoly, power directly and rebuild their local economies. So please take a minute and go to ilsr.org and click on the donate button. And if making a donation, isn’t something you can do, please consider helping us. In other ways, you can help other folks find this podcast by telling them about it, or by giving it a review on iTunes, Stitcher, or wherever you get your podcasts. The more ratings from listeners like you, the more folks can find this podcast and ILSRs other podcasts: Community Broadband Bits and Building Local Power. Thanks again for listening now back to the program. That is terrific, your discussion of this partnership flip thing, which I happen to understand having spent a lot of time trying to understand project finance in renewables. I want to get into that a little bit, because I think this gets into this bigger issue about the barriers that we have to structuring clean energy projects in a way that provides these kinds of community ownership or community benefits. So we published a report in 2016 called Beyond Sharing, and, and it looks at barriers to community renewable energy. How do we get past them? One of the reasons we were looking at this as we were seeing the rise of subscription-based community, renewable energy model, a private individual private company was building a community solar array, and then folks were getting basically a bill credit for on their electric bill for signing up to participate in this community solar project, but they weren’t owners. And so, as you mentioned earlier, some of the decision making that happens around these projects, like deciding where they’re going to get built or deciding the project priorities about, you know, who we hire to do the work or who should benefit from it. Aren’t retained when we do that structure, we highlighted in that report. |
| Lynn Benander | Well that’s only if consumers don’t own it. |
| John Farrell | Right. Right. Exactly. And it’s– |
| Lynn Benander | Sorry for interrupting, right? |
| John Farrell | Exactly. Because we can have, you can have ownership and a subscriber model, but you often have them being diff you often don’t have that. You often have participants just subscribing to get an electricity discount, essentially, rather than having that decision making power.
And, and the, I guess the question I have for you out of that is in the report, we highlighted a few things like tax credits. Uh, so you, and you mentioned tax equity investors. So could you explain a little bit about why do you need to have this flip model? And I guess what’s maybe more interesting out of that then is after you’ve explained why you have that, or why you use that. Is there some way we could do it differently that would make it easier for Co-op Power and other cooperative entities to finance solar energy?
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| Lynn Benander | So we use a variety of models. This is one of them. And this one we use largely when we’re doing work in low income communities, because the community doesn’t have to put any money up front. We can partner to raise the pre-development money that’s needed in our multi-class cooperative. We can get access, access to enough money to do the pre-development work, and then bring in the tax equity investor and the lenders to pay the full price for the project. And then over time, within five or six years, we can be the a hundred percent owner. And then within 15 years we can pay off the debt usually, and the projects have about a 25 year life. We use that model just it’s it’s the model that gets us ownership, the soonest with the most financial value retained in the project. So there’s something worth owning, right.
There used to be that there were grants in lieu of tax credits, which worked even better. We haven’t had those available to us for a long time, but that would be far better than it’s expensive to do the partnership slip financing models. And you have to have, you have to scale up to a pretty good size in order to make those projects viable. But we’ve, we’ve found a way we’ve spent a lot of years. Re-engineering the, the mechanisms of the tax equity flip model to be able to serve our purpose, just to benefit people in communities. And we’re pretty excited about the results of that, of that work. But we also have, we just turned on about two months ago, a cooperative subscriber project, where our members bought panels and co located them on a shared array. And then they all get the Dell bill credits assigned to their electric bills and they are able to use the residential tax credit, so we didn’t need a separate tax equity investor. You need to be able to either have people able to use the residential tax credit or the commercial ITC investment tax credit in order to finance a project and have it save people money on their electricity. If you step aside from that tax credit, which was 30% now, 26% for the ITC. If people have to step aside from that, it’s hard to get the electricity that they’re going to be receiving. It’s hard to have it, so they don’t have to pay more than what they’re paying for their electricity now. And of course, serving low income communities. That’s not, that’s a nonstarter. So we have to find a way to be able to monetize the tax credits for the projects that we’re working on in order to make them financially work for people.
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| John Farrell | And I think you mentioned this cost of tax equity. So, you know, I think this is worth emphasizing. So what’s happening here in terms of getting access to tax credits. So you have these customers who probably can’t access the tax credit because they don’t pay enough in taxes to get a tax credit. We’re no longer in a situation like we were, I guess it was almost 10 years ago. Now that we had those grants in lieu of tax credits after the financial crisis, uh, that allowed anybody to just get cash in order to do these projects, it cost the government the same amount of money it’s worth pointing out, but it was just as a cash grant instead of as a tax credit or when they provided that. And then, and the difference, then it comes into this, this one particular kind of investor. So if you need somebody who can help you capture the tax credit, you’re basically find somebody who’s already wealthy, who already has a lot of tax liability.
They already have a big tax bill and they are going to basically give you money in order. They can capture this tax credit and lower their tax bill, but they have some fairly high return requirements. So I have actually sort of, I’ve got an analysis that we put together a few years ago before the tax credits were extended. So this was, I think in 2016, when there was a lot of discussion about whether or not the solar and wind tax credits were going to be extended and wanted to look at well, what is really the cost to projects of having to seek tax equity partners, and these folks get something like a 10 or 11% return on their investment, at least in the analysis that we did, in order to provide that money, which obviously if you’ve got money in a savings account or anything else like that, or a, you know, a treasury certificate, that’s a lot less that you’re making than these folks are making for, for these projects.
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| Lynn Benander | I think most of the benefits that goes back to the tax equity investors comes in the tax breaks. They get both from the depreciation as well as from the tax credit. And so the project doesn’t have to pay them for that. Our federal government– |
| John Farrell | Mhmm. |
| Lynn Benander | Pays them for that, right. Or has them not have to pay them for that. So the cash that the tax credit investor gets well, the minimum is about 2% a year for five years or for a total of 10% on their cash investment. And so that’s pretty low 2% a year. We don’t find that it’s actually cost-prohibitive at all. It’s 10% overall, but over a five year period and the way that they’re able to monetize those other tax credits and the depreciation benefit is of great benefit to the project. So with socially responsible tax equity investors, which when we started sounded like an oxymoron, but it actually, there are really wonderful human beings and organizations that are happy to pitch in and make this work. And we have developed a set of legal documents that I’m told is worth somewhere around 150 to $200,000 where we’ve retrofitted our mission and values into this process. So we’ve got a set of legal documents. We’ve got a group of investors and lenders, and we’re expanding that all the time. And we’re bringing our projects up to scale so that our investors can afford to do projects with us. There’s a certain threshold of due diligence they have to do on the project in order to make it work. And it’s turned out to be quite successful, I think, financially. |
| John Farrell | It’s great to hear that. And I think important to highlight that particular element that these tax equity investors are really getting paid by the government, what I, what we looked at in our analysis. And I can think where I was going with that cost thing, but it kind of takes me too long to get there. So I’ll refer people to this. If they want to look at it, it’s a blog post on our website called further thoughts on the economics of losing the federal tax credit. But what we looked at was essentially what would energy cost from a solar project, if you could capture all of those tax benefits locally, and didn’t have to go through an intermediary and it’s, so it’s not to say that it doesn’t work out for projects to do that or that there aren’t wonderful people out there with tax equity who are willing to help make projects work in a world in which we have the tax credit, but was really sort of the counterfactual of what, if we instead had that cash grant, what would that look like for projects and how much less expensive would the energy cost if you were doing it on the cost basis, you know, per kilowatt hour, if we didn’t have to do that. |
| Lynn Benander | Even though we’ve invested almost 10 years of research on how to retrofit the tax credits, and we have developed this very valuable set of legal docs, standard legal docs to make it work, we did not– we did not lobby to keep the tax credit. We don’t believe it’s useful in the long run. We think it’s better than nothing, but the feed in tariff structure or the grants in lieu of tax credits, those are all much easier ways to meet the needs, the energy needs of communities, than the federal tax incentive tax credit. |
| John Farrell | So I don’t know if you’ve run across as land and I’m, don’t want to dwell on this particular topic too much longer, ‘cause there’s a couple of other things I definitely want to talk to you about. But I was told once by somebody that the reason that we do tax credits instead of cash grants really comes down to economizing on votes in Congress, which is that it only takes one vote of Congress to authorize a tax credit. But if you were to do a cash grant, you have to have two votes, one to authorize a cash grant and a second one to appropriate the money for the program. And so that in order to make sure that they like a limitless pot of money as available a tax credit is what they decide to approve because it’s easier to get it through Congress than it is to do a cash grant, which I always just found fascinating that we are sort of held hostage to this process in Congress from doing this in a way that would be more equitable. |
| Lynn Benander | The ITC legislation– investment tax credit legislation– now gives wealthy people the right to make money on their money, and ensures them a minimum return in a way that epitomizes inequity. Instead of finding ways for all of us, everyone, to be able to invest in our economy and make things work in their communities. As we’ve said, only this 1% of the 1% is going to be eligible to participate as owners, it’s really not a good way for a country to be supporting solar development at all. And what I’ve heard is that because it requires appropriations because you actually have to find money and take it from somewhere that it’s politically just, it just doesn’t work, but I don’t know why they don’t just open up the investment tax credit to anyone. Like why does it have to be only for-profit investors? Why does it have to be only people with passive income? Why can’t it be anyone that can pull money to invest in solar? Why can’t they be eligible for the 30% tax credit and the depreciation benefits? I-I’ve never had anyone tell me what it is, but it’s reserved for this very small group of people and corporate entities that are eligible. |
| John Farrell | Right. Right. Yeah. Or even to make like, uh, other tax credits to make it refundable so that you don’t even have to have the tax liability, but you can still get the credit as a cash payment. |
| Lynn Benander | But then they’d have to fund, they’d have to fund that. Then I think that’s the issue. |
| John Farrell | Right? |
| Lynn Benander | If you find the money from somewhere, if you, if you say money’s going to go out, I understand that. Although I think this is worth funding. |
| John Farrell | But the, I guess the money though, just to play devil’s advocate here, the money comes from somewhere for a tax credit too, right? Like you have, you’ve budgeted a certain amount. You’ve assumed a certain amount of income is coming in. But if solar grows twice, as much as you expected, then they get federal. Government’s gonna pay out twice as many tax credits and have to get that money from somewhere. |
| Lynn Benander | I totally agree with you. I think that’s logical, but I don’t think it works that way. I don’t think they have to say where. Curious huh? |
| John Farrell | It is curious. All right. Well, without getting ourselves totally lost, Lynn, in this weird conversation about federal budgeting, let me, let me take us back to this terrific work that Co-op Power is doing, helping scale up community focused energy projects. And one question I have is, and I think this is kind of important in terms of the big picture in the long run. We want to see more community based and community owned projects. Those are the ones that really redirect the dollars in our energy economy, into communities and make sure that everybody is benefiting from this clean energy transition. So why aren’t we hearing about billion dollar energy cooperatives? How can this scale up so that the biggest projects or, or the biggest benefits are accruing to communities? |
| Lynn Benander | Well, I think there are, there are a number of issues. One is access to capital. Another is utility policy and how that gets implemented. And another is just belief systems. It’s so interesting. We applied to the Department of Energy for a grant to scale up our solar projects. And we were partnering with Cooperative Energy Futures at Minnesota and Co-op Power in new England and New York. And together we had more than 10 megawatts of community solar projects. And we were looking to use that as a bait base to scale up from there, as we felt like we had the, you know, we, we could prove we had all the pieces and we were, we got a letter back saying, don’t, don’t apply because it’s not possible to scale up your projects.
And it was kind of breathtaking. Cause I, I don’t think there’s a question that we can scale up the projects. We just have to solve the problem of money and utility policy and the belief systems around what’s possible. And if people believe that communities really can’t build their local economies and then the bankers don’t ever lend any money and no one ever gives local initiatives, any capital, you know what they’ve made that come true because you can’t start a business, you can’t create jobs. You can’t create solar projects without capital. And if you believe in it, you can make it happen. So I call up power. Our members have put in two and a half million dollars in number loans and we’ve built 18 businesses and more than 400 jobs in local communities because they believed in it and they made it happen. And they brought, they brought the market, they bought the stuff they brought, they were the workers, they took the jobs. They, they were the investors they provided the capital needed to launch. And they were also the voters who brought their political power to help provide enabling legislation for the work that they wanted to get done in their communities. So we, as people have phenomenal power. And, but we do have to believe in ourselves just to start with, that’s just the place to begin. And then we have to convince the people around us. So as co power has gotten bigger, we’re now able to access bank loans. Even CDFI loans were very hard for us to get for a long time. So out of necessity, we raised our own money and now we’re able to get funding from other, other arenas. And we’re using our network and Cooperative Energy Futures in Minnesota is using their network in order to create a platform so that other community based efforts won’t have to take five or 10 years, or 15 years in our case to build the base so that we’re able to access capital. So if we believe in our local organizations and believe that indeed as Michael Shuman said in his book a long time ago, local dollars local sense that most of the more than half the economy is local initiatives, government initiatives, nonprofits, small businesses. And if we really believe in that sector, which factually exists and support it, it gets far fewer dollars than, than huge businesses who spend a lot of money to create a job it’s more cost effective to do it at the local level. So we’re kind of making that happen, making that case with the solo work that we’re doing and in order to make this work. So we need the belief system, we need the money and we need utility policy. And in order to get utility policy, to be more responsive to communities, we need a lot more political power. So as we organize our cooperatives, and if people see with community trust, aggregation, and maybe even the solar projects, they built to provide the power for those, as they get more involved in the energy economy, they can see that these things are attainable. And as, as we have more, more, more of a political voice, power, more political power, a stronger political voice in the utility policy arena, we’ll be able to have utility policy that that is supportive of solar right now. It’s, it’s often not. And the barriers that are put up in terms of money and timeline and changing policy has made it like you’re just in a big gambling game to see where your projects are going to spin out into terms of the different policy options. And it’s, it could be very frustrating and expensive, but we’re, we’re persistent. And we believe that over time, things are gonna start to make more sense, but we love the work that you guys do and feel like it’s just so important that people understand more with the seven years and how to become more involved in getting policy. That that makes more sense for it because I think it’s going to help us solve all of those issues by being able to get money out to people for these kinds of community owned projects and together, maybe give us more of a voice in the political arena too. And we’ve got a website cooppower.coop a little redundant, but there you go. cooppower.coop. And you can find a lot of information there, especially if they’re in new England and New York, but the work that we’re doing nationally in partnership with other community, solar developers like ourselves with collaborative energy teachers and with some very exciting groups like the Indigenous Environmental Fund and the Climate Justice Alliance and the local community Alliance is very involved in the CCA movement and the working world and New York city. These organizations have created a new cooperative called the People’s Solar Energy Fund, and we’re kind of pooling our resources to make all of this available to anyone in the United States. So I think that’s another player to look out for because I think it’s going to help us solve all of those issues by being able to get money out for people for these kinds of community owned projects together. Maybe give us more of a voice in the political arena too.
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| John Farrell | Well, Lynn, I really appreciate you joining me for this conversation and best of luck in your work with Co-op Power and to look forward to working with you more in the future. |
| Lynn Benander | Sounds great. Thank you so much. |
| John Farrell | This is John Farrell director of ILSR’s energy democracy initiative. I was speaking with Lynn Benander president of Co-op Power about their work to expand cooperative ownership of renewable energy for more on busting. The barriers to community renewable energy check out ILSR is 2016 report titled beyond sharing. You can also find two more local energy rules, podcasts about energy cooperatives, episode 41 features Isaac Baker also from Co-op Power and episode 57 features Timothy den herder Thomas with cooperative energy future Cooperative Energy Futures in Minneapolis. While you’re at our website, reviewing these other resources, you can also find more than 90 past episodes of the local energy rules podcast until next time, keep your energy local. And thanks for listening. |
Co-op Power’s Powerful Platform
A powerhouse in more ways than one, Co-op Power operates in the Northeast United States as a consumer-owned cooperative connecting more than ten thousand members. Co-op Power serves as a “platform for communities to be able to implement the kinds of programs and create the products, [the] services, the jobs, and the businesses that they want to see most in their community.” Lynn Benander is President and CEO of Co-op Power and for fifteen years she has worked to make renewable energy more accessible for people in Massachusetts, New Hampshire, New York, and Vermont.
We think of ourselves as a commons that communities across New England and New York can come to in order to make good things happen in their community.
Co-op Power’s network of members and cooperatives collaborate to help fund projects developed by local cooperatives, provide management support, and create specific cooperative entities if a project requires lasting guidance and funding.
Co-op Power in the Big Apple
In New York City, Co-op Power works under legislation that encourages the conversion of public lands into solar properties. This policy, along with local cooperatives, facilitates community investment in renewable energy and energy savings. Benander explains that the current policies in New York create opportunities for solar projects to serve and benefit low-income areas that need the energy and financial benefits the most.
Benander highlights Co-op Power’s focus on tailoring pathways to ownership to each project’s local circumstances. Whether the money goes into the hands of a non-profit, co-op, or municipal owner, “we think that some of those funds really should stay in public hands rather than all be shifted to private hands,” says Benander.
The cooperative structure allows us to really address all of those issues in a pretty exciting way
In New York City, members of Co-op Power won a bid to build on the Brooklyn Army Terminal and a separate bid to build on properties owned by the NYC Housing Authority. Benander says that, in this case, New York City and their municipalities didn’t seek ownership in the project. This allowed much of the funding and benefits of the project to return to the serviced communities, including an electricity discount of up to 20%.
Says Benander, “The Brooklyn Army Terminal Solar Project would not be happening without the leadership of UPROSE, Brooklyn’s oldest
Both projects are designed to be financed in a “partnership flip” model. Benander explains that, in each case, the initial investment will come from outside investors or lenders.Gradually, ownership will move to the local energy co-ops to steward and manage the arrays. The Brooklyn Terminal development will add 675 kW of solar generation, powering 150 low-income families in Sunset Park. The NYC Housing Authority project will place solar arrays on more than 40 buildings, adding 1.2 MW of solar energy to the system. That energy will be metered separately and distributed to members of nearby communities that need it most, since NYC Housing Authority building residents already receive discounted or subsidized energy.
Check out Episode 41 of Local Energy Rules to hear from another member of Co-op Power, Isaac Baker.
Funding Community Solar
The partnership flip strategy is one of the ways Co-op Power seeks to secure funding for communities that can’t afford the initial investment, yet still want to retain ownership in the long run.
[Partnership flip] is the model that gets us ownership the soonest with the most financial value retained in the project. So there’s something worth owning, right?
In the past, grants and other direct funding appropriated by the government supported the projects, Benander says, but now the status quo focuses on tax credits for these projects. That makes getting a project off the ground more difficult, but Benander explains that Co-op power has “spent a lot of years re-engineering the mechanisms of the tax equity flip model to be able to serve our purpose, to benefit people in [our] communities.”
Host John Farrell mentions the incremental change of policy that established tax credits as the default financial benefit from developing renewable energy. He points to his 2016 analysis of solar and wind tax credits as an example of where tax credits do and do not work.
Benander reinforces the idea that, with socially responsible tax equity investors, the tax benefit from credits can and will pass to the communities hosting the renewable energy projects. One of Co-op Power’s best tools to make sure all parties involved in new projects see these benefits is a legal document that lays out the process towards ownership and the roles of investors, community members, and Co-op Power itself. This document makes financial success much easier for everyone involved, Benander says.
Despite the work put into their legal documents, Benander holds to the value of grants and feed-in tariffs for pushing renewable energy project development. The lower financial entry point these two offer, in contrast to tax credits, could benefit more communities.
The investment tax credit legislation now gives wealthy people the right to make money on their money, and ensures them a minimum return in a way that epitomizes inequity… It’s really not a good way for a country to be supporting solar investment at all.
Benander and Farrell speak to the political barriers of feed in tariffs and grants, namely the appropriation of funds towards renewable energy. These incentives require an extra congressional vote (and an extra chance to be stopped), as compared to a tax credit. The tax credit, Benander explains, is a benefit reserved for a small group of people and corporations that can afford to meet energy requirements.
Busting Barriers to Community Solar
Other worries involved in finding funding, specifically for community solar projects, are policy restrictions that limit the ability of organizations like Co-op Power to expand. Benander even mentions that projects coordinated by Co-op Power were told not to apply for funding to scale up.
I don’t think there’s a question that we can scale up [our] projects. We just have to solve the problem of money and utility policy and the belief systems around what’s possible.
Co-op Power, Benander says, has built 18 businesses and brought more than 400 jobs to local communities thanks to each community’s belief in their mission. Without the support of local policy and government funding, she continues, the change is much harder to come by. On top of that, local jobs are integral to the ownership, cost effectiveness, and potential of sustained progress in a community.
Benander hopes that, through both supporting and receiving support from its network of members and cooperatives, Co-op Power will continue helping communities in need and strengthen the political influence of community-based renewable energy.
One project she says to look out for is the People’s Solar Energy Fund, an initiative to help communities across the U.S. finance the solar projects they need to reduce energy costs and reduce their impact on the environment. Together with national and local leaders, such as the UPROSE, Brooklyn Movement Center, We ACT for Social Justice, Climate Justice Alliance, Emerald Cities Collaborative, the NAACP, the Indigenous Environmental Network, Local Clean Energy Alliance, and Cooperative Energy Futures, and The Working World, this cooperative effort works nationwide to build up community solar.
For more coverage on the work of Cooperative Energy Futures to expand access to community solar power in Minnesota, watch and listen to Episode 57 of Local Energy Rules.
Episode Notes
See these resources for more behind the story:
- For more on building accessible community renewable energy, read ILSR’s 2016 report Beyond Sharing.
- To learn more about the Brooklyn Army Terminal Project, read this press release from the New York City Economic Development Corporation.
For concrete examples of how cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.
Explore local and state policies and programs that help advance clean energy goals across the country, using ILSR’s interactive Community Power Map.
This is episode 108 of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion.
This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update.
Featured Photo Credit: Sterling College via Flickr (CC BY-SA 2.0)
