by Jeffery Earl, Bose McKinney & Evans
Solar energy and other renewable resources offer a multitude of solutions to Indiana municipalities – they can be a way to address rising utility costs, and the desire of officials and constituents to expand the use of cleaner sources of energy. As the cost of solar panels continues to decline, municipalities can affordably install and generate their own energy to offset utility bills or potentially to sell the solar energy as a source of revenue. Municipalities also can use smaller solar energy panels to power parking meters, temporary traffic signs and similar equipment. And the continued development of electric and natural gas fueled vehicles offers municipalities options for a fleet of vehicles with far less greenhouse gas emissions than traditional gas and diesel powered vehicles.
Municipalities are typically well-suited to the use of small- to mid-sized solar panel systems. These systems can be located on municipal land or installed on the roofs of municipal buildings, such as public works buildings, town and city halls, and police and fire stations. Municipalities also often have sufficient space to install solar panels in the areas in and around bodies of water or waste-water treatment plants. By installing solar generating systems, a municipality can generate electricity for its own use and offset its need to purchase energy from the local utility, lowering the municipality’s monthly utility bill. Municipalities are particularly well-suited to using solar generation to offset energy purchases because they primarily use energy during daylight hours, when solar generation is most efficient, and can therefore maximize the benefit of offsetting their energy usage. For this reason, schools are also particularly well-suited to using solar generation. As the cost of solar installations drops and battery storage options grow, Indiana companies are developing and offering a multitude of creative options for municipalities and schools to take advantage of solar generation.
Smaller solar panel units also are available to power stand-alone devices such as parking meters, temporary traffic signs and emergency telephones. These smaller applications are typically partnered with a battery storage system, which charges using solar energy during the daytime and powers the equipment at night. These small solar units help defray the cost of purchasing and replacing regular batteries for the units and allow rechargeable batteries to be charged with clean, solar energy.
In addition to generating electricity for its own use, a municipality with a mid- to large- sized solar farm also can generate and sell solar energy as a source of revenue. Currently, these energy sales occur most commonly through contracts with a local or nearby utility to purchase all of the output from the solar farm, which are called purchased power agreements. Contracts are typically limited to the output from a single solar farm, requiring a fairly large solar array to attract interest from a utility to purchase the energy output at a competitive price. But a recent decision by the Federal Energy Regulatory Commission could allow a municipality to aggregate the energy from solar arrays located throughout its community for sale directly into the wholesale energy market. This could allow a municipality to create a large “virtual” solar farm using its smaller individual systems. In addition, access to the wholesale energy market would expand the list of potential buyers and offer additional options to sell the solar energy.
In the area of transportation, many municipalities already are incorporating electric vehicles into their municipal fleets and public transportation. IndyGo, for example, placed its Red Line rapid-transit bus line into service in 2019, using electric motor buses and wireless charging stations. Municipalities also can install electric vehicle charging stations for use by the city fleet, or the public, and can combine the charging station with a solar generating array and battery storage to provide a portion of the charging electricity.
Electric fleet vehicles are not the only green option for municipalities, either. Natural gas fueled engines, such as those created by Cummins, Inc., for light commercial and public transportation vehicles can reduce greenhouse gas emissions by 30-40 percent compared to diesel powered vehicles, especially when coupled with the harvesting of renewable natural gas from biomass for the fuel. Santa Monica, California, is currently transitioning its city transit department to natural gas fueled vehicles using renewable natural gas – they estimate it will reduce the fleet’s carbon footprint by nearly 90 percent.
As the costs to produce and construct solar energy systems continue to drop and other forms of renewable energy become more affordable, municipalities have many new options to provide for their own energy needs or sell energy as a source of revenue in an environmentally conscious way. Whether looking to reduce utility costs, generate revenue or simply respond to the community’s desire to adopt cleaner sources of energy, municipalities would be wise to seriously consider the many renewable energy options available to them.
Jeff Earl represents utility, municipal and consumer clients before the Indiana Utility Regulatory Commission. He also works with cities, towns and counties on matters of municipal law. Jeff is the town attorney for Stilesville, IN.
Jeff graduated magna cum laude from Valparaiso University Law School where he was an associate editor of the Valparaiso University Law Review. During law school, Jeff was a legal writing teaching assistant and completed externships with Judge Robert Miller and Magistrate Judge Andrew Rodovich, both in the United States District Court for the Northern District of Indiana. He also clerked at a law firm in Valparaiso.