SunSmart pioneers first community solar project

Utah Governor Jon Huntsman speaks at the dedication of the SunSmart Solar Farm in St. George. The community solar farm allows town residents to invest in solar energy without having to put panels on their homes. (Photo by St. George Energy Services Department)

Even the most enthusiastic supporters of renewable energy, eligible for tax credits with a list of reliable contractors in hand, can hit a wall when it comes to siting a home solar array.  The rooftop is too small, the building orientation isn't quite right or they just can't part with that gorgeous old shade tree—in short, they have no place to put the panels.  St. George Energy Services Department has come up with an answer for city residents facing that conundrum: SunSmart.  

The city teamed with Dixie Escalante Electric to build a photovoltaic (PV) facility and sell residents shares in the community solar farm.  For an investment of as little as $3,000, municipal utility and electric co-op customers receive locally-generated sustainable, maintenance-free solar energy—and a monthly credit on their bill.  "It's a great no-risk option for people who can't put up their own solar system for whatever reason," said city Conservation Coordinator René Fleming.

Hedge against energy prices

The SunSmart program sells a 1-kilowatt (kW) "unit" of installed solar PV capacity for a one-time payment of $6,000, or $3,000 for a half unit, with a limit of four units or eight half units. Each month, participants receive a credit on their energy bill for the amount of energy produced by their units. The price of energy determines the value of the credit, so it goes up with the price of energy.

In response to customer questions about return on investment, Fleming explained, "It's more like paying your utility bill in advance to lock in a stable rate. It is also about environmental stewardship and powering your home in a sustainable way," she added.

One unit supplies power equal to about 15 percent of the average home's monthly power, or roughly 140 kilowatt-hours per month. SunSmart guarantees a minimum output of 800 kWh annually.

Subscribers own their units for a minimum of 19 years, equivalent to the average life of a solar panel. After 19 years, the city will evaluate the panels to determine if they need to be replaced or repaired, and how much it would cost. The owner may choose to pay the cost, if there is one, and continue owning the unit or decline and make the unit available for others to purchase.

Tax credits, project funding

Because the project is municipally-owned, subscribers may also be eligible for a one-time state tax credit of 25 percent of the purchase price, up to $2,000. Bradley Last of the Utah House of Representatives sponsored an amendment to the state tax code so that it treated buying a unit from the SunSmart facility the same as installing a home solar array. Because the program is so new, the Federal tax code does not have a provision for buying shares in a solar facility.

Funding, too, can pose a challenge for an innovative project, but the partners came up with an innovative answer. Each power provider put up half the money to build the 100-kW first phase of what will ultimately be a 2-MW facility. The proceeds from the sale of all the units in phase one will finance the construction of phase two, and so on until the site is built out.

So far, 26.5 units of the farm's first phase have been purchased. "We had a lot of interest from customers when the project started before the economic downturn," Fleming noted. "Then, the stock market dropped and people got nervous about spending the money or they just didn't have it. As the economy picks up, we believe subscriptions will, too."

Local control

Her confidence is based on the consumer demand that drove the creation of SunSmart in the first place. "Many of our residents have concerns about coal-fired powerplants, and they were urging the city to look into renewable energy options," Fleming recalled.

Located in southern Utah, St. George is blessed with both abundant solar resources. There is a strong community feeling, as well, that the Energy Services Department felt the project should honor. Fleming described a wind development in neighboring Iron County that would be sending its generation to California. "So Utah doesn't get the benefit of its own resource, and California doesn't have control of that particular power supply." On the other hand, she said, "SunSmart generates power in Utah, for Utah consumers. That's not only good for the environment; it is good for the community, too."

The project also avoids wheeling fees and transmission losses associated with remote generation. The power from the solar farm is sent to one of St. George's substations and is then transmitted throughout the community on the existing distribution grid. Customers don't need to worry about interconnecting their system, but they can "visit" their panels at the SunSmart facility. They can also check the plant's output online. "As a fringe benefit, it's a great tool for educating the public about renewable energy," observed Fleming.

SunSmart is a great response to the phrase, "I'd love to install solar on my home, but…" For now, it is available only to residents of St. George, but Fleming has fielded several calls forwarded to her by the Utah State Energy Office. The city of St. George can proudly claim the nation's first community solar farm, but it is not likely to be the last.

Resources

St. George Energy Services Department

Dixie Escalante Electric

SunSmart

SunSmart output

Utah State Energy Office

People

René Fleming

Utah State Representative Bradley Last

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