In this edition of Local Energy Rules, John Farrell and Wade Underwood speak with Steve Johnson of Convergence Energy about a successful 660 kilowatt community solar project near Delavan, WI. The project required 33 separate LLCs to take advantage of the state’s net metering rules, and also used the limited-time federal cash grant program to pull it together. Unfortunately, the policy environment isn’t as favorable for repeats, and Convergence has interest in, but no plans to replicate the project.
Just north of Delavan, Wisconsin, is Dan Osborne’s nursery farm. Where you once found a bean field now sit 80 solar panels on 100 tracking towers, generating power for over 125 homes. It’s a small, but successful energy harvest. The solar farm was developed by Convergence Energy of Lake Geneva, WI. Steve Johnson, vice president of business development, spoke to John Farrell and Wade Underwood about the solar farm in Delavan,
“The genesis of the project from the beginning was to try and provide an offsite location for individuals interested in investing in solar.”
Many individuals interested in going solar can be stymied because their property has tree cover or inadequate roof space, so Dan Osborne’s fields offered a better option, a community solar project.
Dan, who had worked with Convergence in the past, offered up 14 acres of his farm for the 660 kilowatt (kW) facility outside of Delavan. From there, Convergence arranged for 33 individual Limited Liability Companies to invest in 20 kW increments, which are sold back to the utility at retail price as a part of the net-metering policy (note: the utility’s net metering policy does not require the solar project to offset on-site load). The state’s net metering policy caps projects at 20 kW, hence the 33 separate companies.
In addition to receiving the retail electricity price for solar electricity produced, the projects also received grants from the state’s Focus on Energy program and used the cash grant option (since expired) in lieu of the 30% federal tax credit. Project investors signed up for either an 11-year or 20-year investment term (with an 8% return on investment) after which the project ownership reverts to Convergence Energy.
As Steve says, their investors are happy with the solar farm, but there have been precious few opportunities for similar networked projects to grow. The federal cash grant program has expired and the Focus on Energy incentives have been reduced. Despite the changed landscape, Steve and Convergence Energy are keeping their eyes open for opportunities where the success from the Osborne farm might be replicated. It’s small seed that they want to see growing in many places.
This is the third edition of Local Energy Rules, a new ILSR podcast that will be published twice monthly, on 1st and 3rd Thursday. In this podcast series, ILSR Senior Researcher John Farrell talks with people putting together great community renewable energy projects and examining how energy policies help or hurt the development of clean, local power.
Photo credit: Dan Lassiter, from Walworth County Today