A Minnesota electric cooperative has devised a unique business model for solar power: install the panels on city-owned properties and, in return, the city government gets discount-priced electricity.
In the first deal of its kind, the Wright-Hennepin Electric Cooperative Association has agreed to give the city of Rockford a 7 percent discount on its electricity for 25 years. The city is giving the utility no-cost leases at two sites where 331 solar panels will be installed later this year.
"This is the first deal of its type that I'm aware of," said Cliff Bolstad, Minnesota-based regional vice president for electric distribution at CoBank, a large cooperative lender that has financed many solar deals, including this one.
If the pilot project is successful in Rockford, a city of 4,300 people about 30 miles west of the Twin Cities, Wright-Hennepin says it intends to offer similar deals to cities, school districts and other interested large customers in its northwest metro service area.
Other co-ops around the country are watching. "Wright-Hennepin is the trendsetter," Bolstad said. " … Assuming this goes successfully, I wouldn't be surprised if we see such more of it in the future."
The deal with Rockford, signed in late June, will offset with solar 67 percent of the Rockford municipal government's electricity use. The solar panels will be installed on the roof of a city-owned mall and land adjacent to a city water tower. Projected savings are relatively small — $5,200 per year on the city's electric bills — but there are no upfront costs. The deal also contains an option to expand the solar arrays.
"We are trying to be forward thinking and proactive about green energy," said Dan Madsen, Rockford city administrator and special counsel.
Innovations in solar
It is not the first solar innovation at Wright-Hennepin co-op. In 2013, the member-owned utility built the state's first community solar garden. That project, adjacent to the utility's Rockford headquarters, allows homeowners who don't want or can't install rooftop solar panels to subscribe to a share in the large centrally located solar array.