MARQUETTE — Marquette is on track to have its own community solar garden by next summer, offering city residents the chance to source renewable energy from the sun.

The best part? The program will pay for itself.

The Marquette Board of Light and Power at its regular meeting Tuesday adopted, in a 4-1 vote, a “buy all sell all” plan for its new community solar garden, which will open for sign-up in early 2017.

The project, which has been in the works for about three years, will offer residents and businesses the opportunity to benefit from locally produced renewable energy without having to install solar panels on their property.

Buy-back rate

The board set the buy-back rate that customers would be credited at 6.3 cents per kilowatt-hour, which, while on the low end, could be raised as additional value from solar is quantified in the future, officials said.

The garden will be located on site at BLP offices to maximize solar exposure and reduce cost to participants, according to BLP’s website. Customers can participate by investing in the garden and receiving credit on their utility bill for the power produced.

Erik Booth, BLP manager of planning and utility compliance, said the rate of 6.3 cents per kWh is subject to increase with the value of solar energy, particularly if there is a tax on carbon in the future. But it won’t be a big money-maker.

“We were really happy … to find out this project paid for itself,” Booth said. “I mean, if your goal is to make money, solar’s not the place to put it, there’s no investment to be made. This is a way for you to, instead of buying your power from a carbon source, it’s a carbon-free source, and it pays for itself.”

In order to calculate a buy-back rate based on avoided costs, the BLP awarded a contract for a solar valuation study in January to Utility Financial Solutions, LLC based in downstate Holland.

The study, available on the BLP’s website, analyzed factors like energy savings from solar as compared to a natural gas fired turbine, generation capacity savings, electric loss savings and distribution system savings. The study did not include environmental benefits, as they are not a direct cost to the BLP at this time.

Costs and benefits

The BLP is contracting with Michigan Energy Options for marketing, website, sales and integration of the solar garden.

BLP Assistant Director David Lynch said more than 300 customers have signed onto the interest list, which went up in June.

The cost of solar panels has dropped about 30 percent since January, making the current all-in cost estimate $1.83 per watt, “which is phenomenal,” Lynch said, adding that when he self-installed his own solar system four years ago without labor, it was $4.29 per watt.

The target price per solar panel is about $500, which includes incentives through the Michigan Energy Optimization program and would be the minimum buy-in share for customers. But, Lynch added, the price is still being negotiated, so it could be lower.

The total output of the solar garden, with 480 panels at 315 watts per panel, would be 151.2 kilowatts, Lynch said. There would be opportunity to expand the solar garden to other locations if interest surpasses that number of panels, he added.

“The price is very, very good,” Lynch said. “Customers would see a net gain. That’s where we are today, and establishing this rate will allow us and MEO to finalize the details of the project and get the marketing ramped up and ready to go in the first quarter of next year, January hopefully.”

Booth said collecting data specific to Marquette will be another boon of the solar garden, since the UFS study had to use data from Sault Ste. Marie, which is theoretical.

“This allows us to collect the data that we need to truly develop what I think is (going to) be a separate rate class for folks that want to install rooftop solar systems. You just can’t do it without the data, so there’s a huge benefit to the BLP for going to a community solar system and collecting all that data,” Booth said. “A year or two years down the road, … we can truly set up a good rate class that’s sustainable (and) that’s adaptable, in that we’re not making massive changes to it like we did with net metering, we’re tweaking it down the road like we do with our other rates.”

Board reaction

The board was mostly in favor of the plan, with Jerry Irby calling the garden important and exciting and Dave Puskula calling it a “great step forward.”

Puskula said the true cost and benefits of solar can be assessed more accurately later with more data, but that it’s important to start from a cost avoidance standpoint.

“We can diverge later because we’re (going to) take in other soft-type costs,” Puskula said. “But I think this is a great starting point that gets us at least in a direction that I’m confident with, that I think is good for all customers, including those that want to be participating in solar and renewable energy.”

Board member Dave Carlson voted against the plan, saying it doesn’t go far enough.

“We haven’t looked at some of these other benefits from solar, I think that needs to be part of what we do,” Carlson said. “UFS is not inclined to look very far down the road, and I think that we need to be pushing that even further in that direction.”

Public Reaction

The meeting was well-attended with standing-room only in a room with about 20 seats.

Robert Kulisheck, chairman of the Marquette County Climate Adaptation Taskforce, said during public comment he commended the BLP for going ahead with the project, and suggested the utility continue to look into renewable sources of energy in a broader, more systemic way, while drawing on expertise within the community.

Ann Becker said the rate of 6.33 cents is too low, that UFS didn’t take all criteria into account in its valuation and that “more transparent research needs to be done.”

Jim Becker said there is wide support in the community for efforts like this, and that a group should be formed to make formal recommendations.

“I think we have a really great opportunity,” Becker said. “I know we’re a little microcosm of a utility in a very small place on a very big planet, but we can still do something in this arena and we can be a leader in the field.”

Jorma Lankinen thanked the board for pursuing the solar garden and said it is a “fabulous opportunity” to extract energy from the “big old sun out there.”

“I also encourage you to look a bit further,” Lankinen said, adding that the Marquette Energy Center, slated to be complete by June 2017, is going to generate millions of BTUs of heat through its stacks.

A British thermal unit is the amount of work needed to raise the temperature of one pound of water by one degree Fahrenheit.

“Every country in the world extracts that heat into heating and cooling the community, except the United States, they waste it,” Lankinen said. “And yes, it costs to build the infrastructure, but please look at all the millions of BTUs that are being wasted, to use that energy in a constructive way.”

Puskula said he supports that idea.

Other action

The board also finalized a plan to grandfather in existing net metering solar customers and made updates following the November elections. The board welcomed newly elected member Robert Niemi to his first meeting and voted Puskula to be vice chairman and secretary, replacing Jerry Garceau, whose term ended.

The board approved the legal language to grandfather in net metering customers based on the final decision from five previous meetings. The policy allows the 17 current customers with solar panels to continue to sell energy back to the grid for credit at retail rate for a period of 20 years from the time they connected to the BLP grid. The board will develop a more sustainable rate system for future solar customers in the coming months that will be less advantageous to the solar customer, but will help offset the BLP’s real cost.

Mary Wardell can be reached at 906-228-2500, ext. 248. Her email address is mwardell@miningjournal.net.