ENVIRONMENTAL INITIATIVE AWARDS:
This project has been selected as a winner in the Community Action category:
governmental solar garden subscriber collaborative
The Governmental Solar Garden Subscriber Collaborative was a joint effort by and for 31 local governments in the greater Twin Cities metropolitan region to procure solar garden subscriptions from a single Request for Proposals (RFP) process to offset the energy usage at public facilities.
By working together, the participants sought to gain an economy of scale in the solicitation process that could help to attract developers, reduce the administrative burden to vet those developers, and yield better pricing and subscription terms.
Community Solar Gardens (also known as Community Shared Solar systems) create an opportunity for individuals and organizations to receive the benefits of solar without installing it on-site. For local government entities, these benefits include supporting clean energy and its positive local economic impacts, saving on energy bills for public facilities, and hedging against the future price volatility of electricity.
Since the passage of community solar garden legislation in 2013, large local and state government entities realized that they were ideal solar garden subscribers in the eyes of developers, given their longevity and excellent credit ratings. In January of 2015, Hennepin County hosted a meeting with a group of large local government entities to discuss opportunities for collaboration, including how the Metropolitan Council might lead a joint RFP for solar garden subscriptions.
By February of 2015, a project team formed to begin developing a joint RFP. Local government participants included the Metropolitan Council, Hennepin County, Ramsey County, and the City of Minneapolis, with organizing support from the Metro CERT program at the Great Plains Institute. The Met Council acted as the procurement, financial, and technical lead for this project, which included writing (with input from the project Steering Committee) and publishing the RFP, as well as conducting negotiations with the selected solar developers. Together, this group comprised the minimum of number of subscribers required for each solar garden. However, in order to both reach scale and provide assistance to other communities, the group decided to open the project up to any government participant that was willing to sign a letter of intent to participate, with the original 5 entities comprising the project Steering Committee.
As a result of this project, 31 local government entities were engaged in seeking proposals for 180 MW of solar garden subscriptions to offset energy usage in public facilities. To date, 24 of those participants said that they were moving to sign subscription agreements for a cumulative 33 MW of solar capacity. 5 participants had decided not to sign any subscription agreements offered, and an additional 2 participants were still considering the opportunity. To provide some perspective, in 2015 Minnesota generated 35 MW of solar total.
By conducting this project, we’ve clearly established that collaborative procurement of solar garden subscriptions for local governments is a viable pathway for scaling up the deployment of solar PV in utility territories where the opportunity exists. As more community solar programs emerge across the U.S., governments, nonprofits, and utilities would do well to consider whether the work of a single entity can be amplified to serve multiple entities for slightly more effort but significantly greater impact. As Falcon Heights Mayor Peter Lindstrom stated “Working together is a lot better than working alone…trying to reinvent the wheel.”
City of Minneapolis
How did the project partners work together?
This project was made possible primarily by the abilities and staff capacities of the organizations that made up the Steering Committee, which was responsible for the many decisions that needed to be made throughout the project process. This included deciding to open the project up to any local government participant, determining what specifically to ask for in the RFP, setting project timelines, responding to key questions and barriers, and creating and approving project communications. The Steering Committee met bi-weekly from February 2015 through March 2016. The Steering Committee was made up of the key project partners: Met Council, City of Minneapolis, Hennepin County, Ramsey County and Metro CERTs.
Partners distributed responsibilities in the following manner:
Procurement and Technical Lead – Metropolitan Council
The Metropolitan Council acted as the procurement, financial, and technical lead for this project, which included writing (with input from the project Steering Committee) and publishing the RFP, as well as conducting negotiations with the selected solar developers. The Council also provided technical assistance to participants and, along with Metro CERT, recruited participants for the project.
Lead Convener – Metro CERT
Minnesota’s Clean Energy Resource Teams (CERTs) are a statewide partnership with a shared mission to connect individuals and their communities to the resources they need to identify and implement clean energy projects. Metro CERT was an ideal partner for serving as the lead convener on this project, which included initial and ongoing engagement of and communication with participants, coordinating project meetings and webinars, and providing educational resources and technical assistance. Additionally, staff from GPI developed a computer-automated lottery process to randomly and fairly determine which participants received the best offers from developers
How is the project groundbreaking?
The 31 local government entities that participated in this project were mostly located in the Twin Cities metropolitan region (where Xcel Energy has the bulk of its electric customers in Minnesota). Participants in addition to the Steering Committee included cities, counties, a park district, and a regional medical center. The collaborative provided participants the opportunity to take advantage of the following benefits:
Better subscription pricing enabled by a larger procurement
Faster entry into the solar garden market
Reduced staff time needed to run an individual RFP process
Electric bill savings for public buildings and plants while hedging against the future price volatility of electricity Even with the opportunity to save on staff time during the RFP and negotiation process, participating local government staff members still needed to solicit approval from elected officials and evaluate the offers they received
This type of procurement for solar energy was a groundbreaking, innovative approach that has applied across the nation in only a few regions. We believe it is replicable and will be sharing lessons learn with national leaders.
What are the project goals?
The primary goals of this project were to gain an economy of scale in the solicitation process that could help to attract community solar garden developers, reduce the administrative burden to vet those developers, and yield better pricing and subscription terms.
Our team believed that the significant request from a multitude of local governments would generate significant interest from developers. Furthermore, the large request for energy would generate proposals that were advantageous to the local governments.
The administrative work necessary to create an RFP are often burdensome. Add to it that community solar gardens are a new concept and that energy expertise, for some municipalities, is not a core competency. These are significant barriers that a collaborative approach overcomes.
Relatedly, a goal of this project was to combine the expertise and resources of the local governments. Why go it alone when you can all get in the boat and row together?
Furthermore, an important aim of this project was to promote solar development in Minnesota. Just as city governments benefit from collaborative procurement by eliciting more competitive proposals, developers also receive benefits from participating. Specifically, developers had the opportunity to take advantage of the following benefits:
Reduced marketing and administrative costs – by bringing together a pool of potential subscribers, this project eliminated the need for developers to individually solicit interest from each entity.
Ease the task of finding high-quality subscribers – local governments are ideal subscribers to solar gardens because of their permanent nature, larger electric loads, and strong credit. This is useful for developers seeking to raise capital to build their solar gardens.
What are the project outcomes?
As a result of this project, 31 local government entities were engaged in seeking proposals for 180 MW of solar garden subscriptions to offset energy usage in public facilities. To date, 24 of those participants said that they were moving to sign subscription agreements for a cumulative 33 MW of solar capacity. Five participants have decided not to sign any subscription agreements offered, and an additional 2 participants were still considering the opportunity.
According to a survey of participants, the top benefit of this project, especially to the smaller local governments that participated, was reduced staff time. By taking on the extraordinary burden of conducting the RFP, selection, and negotiation process, the Metropolitan Council provided a level of expertise and assistance that otherwise may not have been available to participants. While some participants might have subscribed on their own, it’s questionable they would have had the staff capacity to run as thorough a process.
As the project developed, it became clear that participants were leaning on each other to learn and make decisions, sometimes with the help of Metro CERT staff, and other times on their own. Survey results found that it ranked as the second-highest benefit after reduced staff time. Another outcome is that joint collaborations, while complex, are doable. As a result of this effort conversations are occurring about other joint purchasing collaboration for such items as solar on public buildings and electric vehicles for local government fleets.
Ultimately, however, what will have long lasting impact is how public and private entities combined their knowledge, skills and expertise to generate subscriptions to 33 MW of solar development.