Third-Party Solar in Wisconsin – Monona Case Study

The City of Monona is a recent Wisconsin case study of a successful third-party solar installation. The city, at no up- front cost, just installed 156 kW of solar PV arrays on roofs of 4 municipal buildings, reported Janine Glaeser, Monona’s Facilities Manager, at the Energy On Wisconsin meeting February 26. “These systems generate approximately 30% of the buildings’ electricity use and are estimated to save the city $9,000 a year in utility bills. This puts the city half way to its 25 by ’25 energy independent community goal by producing 217,700 kWh of renewable energy annually and eliminating 187 tons of carbon dioxide a year” she said.

The city worked with Solar Connections, a Madison-based company, to put the project together. The city entered into a solar service partnership agreement and leased it roofs to Falcon Energy Systems (FES) for 6 years. FES, out of Denver, CO, is the investor and gets the federal tax credits. Monona buys renewable energy credits (RECs) from Falcon rather than electricity at a cost less than MGE’s current electricity rate. Full Spectrum Solar of Madison, WI did the installation and will service the equipment. The panels came from the Minnesota firm TenKsolar. The systems are interconnected by Madison Gas and Electric. According to Jeff Ford, Senior Market Analyst at MGE, who spoke at the meeting, MGE monitors the energy use and electricity output of those buildings every 15 minutes and shows the balance of amount generated over amount consumed on the monthly bill.

Wisconsin’s interconnection rule (PSC 119), which sets forth the terms and procedures for connecting customer-sited electric generation equipment to the utility grid, does not address the issue of third-party ownership of renewable energy systems. In more than 20 states in the U.S, consumers and businesses are allowed to enter into arrangements that allow third-party companies to install solar systems on customers’ property and sell electricity generated by these systems back to the customer. Customer-sited installations in those states have grown as a result increasing clean energy generation and creating jobs.

Solar energy systems require an initial investment to purchase and install. Nonprofit entities such as local governments and schools are not eligible for the federal tax incentives that are available to businesses as system owners. With third-party ownership, the business, not the consumer, finances the cost of the system and takes the tax advantage, lowering the cost of the system; and, the consumer purchases the power at a contracted rate, often lower than the local utility rate.

Read more about this issue here.