July was a good month for solar energy in Milwaukee and Wisconsin. A new City-County task force on climate and economic equity was created, and We Energies’ proposed surcharge for home and business solar customers was abandoned, while more utility-scale solar energy is moving forward.
Both the City’s Common Council and the Milwaukee County Board of Supervisors adopted a resolution to create the Milwaukee City-County Joint Task Force on Climate and Economic Equity. The task force will soon bring together 13 area leaders to make recommendations on how to reduce greenhouse gas emissions 45% from 2010 levels by 2030 and how to net zero gas emissions by 2050. The task force will also recommend strategies for creating more “green” jobs to reduce racial and income inequality.
County Supervisor Moore Omokunde, who sponsored the county resolution, says the goals of the task force are in line with many of the Green New Deal’s goals and those set forth by the Paris Accords. The resolution also links the transition to green energy to the creation of new jobs.
Omokunde says the task force will recommend ways to address climate change through transitioning to green energy and will also define how to translate the transition to green energy into jobs for the future and long-term employment.
The county resolution cites a February 2019 report from the Center on Wisconsin Strategy (COWS) that estimated 100% domestic energy production with renewable sources in Wisconsin could produce a net increase of 162,100 jobs and add almost $14 billion to the state’s GDP.
Tyler Huebner, executive director of RENEW Wisconsin, says solar energy has a huge amount of potential way beyond what it is doing now. “If we already have 3,000-4,000 jobs, we can definitely do 10 times as much solar over the next decade or so,” he says. But his estimate for jobs is far lower than the Center of Wisconsin Strategy report. “I’m not predicting we’re going to have 30,000 people working in solar, but I do think it’s a job creator. It’s a big opportunity for us economically, as well as from a clean energy and environmental perspective.
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‘A huge step forward’
“This is a huge step forward for Milwaukee County and the City of Milwaukee, which has always been a leader in calling for climate action,” says Elizabeth Ward, conservation programs coordinator for Sierra Club-Wisconsin. “They are saying that they want 100% clean energy for the city and the community. While helping us reach our climate goals, it uses the solutions to impending climate catastrophes to solve one of Milwaukee’s greatest and longest problems in terms of the economic inequity in the city, especially with people of color.” Ward sees economic benefits coming from jobs and other forms of economic investment and development and sees opportunities for improving transportation to underserved communities and channeling grants for energy efficiency into “neighborhoods that need it the most and to people that have been historically oppressed.”
Ward says the task force will now have, “the very difficult job of figuring out what does this truly look like, and they will have to ensure that whatever plans and programs are put into place ensures economic and racial equity.” The task force will have 13 members made up of elected officials, community members and representatives from various advocacy groups including Citizen Action of Wisconsin, Sierra Club, NAACP and Milwaukee Youth Council.
Erick Shambarger, director of environmental sustainability at the City of Milwaukee, says the task force is a complement to the ongoing efforts by the City. “I think it is an opportunity to broaden the conversation of stakeholders to include more folks,” he says, noting that climate change is becoming of greater interest to the public, which wants to see more action from political leaders. “Effort is at the local level because it is the city and local governments that have been taking action on climate change. Cities have been trying to fill the void that we had seen at the state and federal level. I’m glad to see the state now has new leadership in the governor’s office talking about climate change.”
Last week, Gov. Tony Evers signed an executive order establishing a statewide goal to make all energy consumed in Wisconsin carbon free by 2050.
Down with solar surcharge, up with utility-scale solar
In July, on a different solar front, We Energies and RENEW Wisconsin reached a settlement agreement. We Energies agreed it will no longer pursue a solar fixed-cost recovery charge, which would have added $15-$20 per month to the bills of its solar customers. RENEW Wisconsin agrees to support an upcoming We Energies utility-scale solar project. We Energies and Madison Gas and Electric (MGE) are partnering to acquire the remaining 150 megawatts of the Badger Hollow Solar Farm near Dodgeville. We Energies will own 100 megawatts and MGE will own an additional 50 megawatts of the 300-megawatt project. MGE already owns 50 megawatts of the project, and Wisconsin Public Service (WPS), a subsidiary of WEC Energy Group, owns 100 megawatts.
“We were able to reach an agreement with We Energies and the Public Service Commission that from our perspective will help grow solar for homeowners, businesses and local governments that want to pursue it, because We Energies has removed what would have been a surcharge on those customers,” RENEW Wisconsin’s Huebner says. “In addition, we’ve agreed to support We Energies moving into utility scale solar to help reduce the usage of coal plants and instead utilize more solar. From our perspective, it’s a win for solar of all sizes.”
The parties agree to remain in discussion over the next two years until We Energies goes before the rate commission again. However, the issue of cost recovery for solar customers is not totally settled, according to Brendan Conway, a We Energies spokesperson. “The cost-shifting does not go away just because of the settlement,” he says. “There is a very real cost shift. People who have solar on their homes still rely on our network, yet because the way costs are billed by not paying a percentage of the energy charge, they are not paying their fair share. Those costs don’t disappear. Those costs get shifted to people who don’t have solar.”
Solar advocates argue that the surcharge was merely an effort to discourage individual solar customers and potential customers.
Eagle Point Solar sues We Energies
In May, Eagle Point Solar sued We Energies and the Public Service Commission because We Energies refused to hook up solar panels owned by Eagle Point. The City of Milwaukee had contracted with Eagle Point to install solar panels on six city buildings. We Energies maintained that the project was illegal because Eagle Point, which would initially own the installation, was operating as a utility because it would have supplied an existing We Energies’ customer with electricity and would have forced Eagle Point to be regulated like a monopoly utility. A similar suit was brought by Eagle Point Solar in Iowa, where the Supreme Court of Iowa ruled against the utility in 2014.
Third-party solar installers can apply for substantial federal tax credits for installing solar, which can be passed along to their customers, whereas government entities cannot apply for the credit, making third-party financing an attractive option for municipalities. The financing arrangement also does not require a large upfront investment. Shortly after We Energies blocked the Eagle Point installation, We Energies rolled out its Solar Now program, which would allow We Energies to own solar installations and pay lease payments to the host customers. The program could build up to 35 megawatts of solar.
Milwaukee decided to stick with Eagle Point for three of its projects and self-finance for three others. When We Energies came out with Solar Now, “What we said was no. We’re good with the projects we had with Eagle Point,” Shambarger says. “We were under contract with them. We couldn’t just walk away. It wasn’t the right thing to do, either. So, we said no. We’d like to get the Eagle Point projects done.” Since that time, the City self-funded three of the projects and installed solar at three libraries: Central, Center Street and Tippecanoe. “The other three projects are still getting challenged at the PSC and in court.”
The city, however, is in the process of moving ahead with some Solar Now projects on city-owned brownfields, land that cannot be redeveloped because of contamination.
“We’ll see how this all plays out with the rooftop third-party stuff, but that shouldn’t stop us with moving ahead with Solar Now on these city-owned brownfield sites that can’t otherwise be developed,” Shambarger says. “If Eagle Point prevails, there still couldn’t be solar on these brownfield sites. That’s why we feel comfortable moving forward there. It still has to be approved by the Common Council.”
Shambarger says that he is encouraged that We Energies pulled back from its solar surcharge and that this would make it more palatable for the Common Council to approve an agreement with We Energies.
“Our stance remains the same,” he adds. “We support a robust and competitive rooftop solar market, but we also support the utility taking big steps to transition its supplies to renewable energy. We need both. We want to work on both fronts. We have to do it in a way that preserves the reliability and affordability of the overall electric system.”
Competition, creative financing
RENEW Wisconsin’s Huebner wants to make sure that the utility doesn’t discourage small solar energy enterprises. “We do want to be sure that We Energies is not the only one that is able to offer those kinds of leases and financing deals to customers.” He explains that, in many other states, there are more marketplace opportunities where private enterprises can also offer the kind of deal that We Energies is offering with Solar Now. “Right now, We Energies is relying on a pretty old—I think maybe it’s 100 years old—section of Wisconsin law to say that only the monopoly utility is able to offer that kind of financing,” he says. Huebner would like to see a level playing field where the private market can offer the same types of financing mechanisms as Solar Now, which would encourage customers to pursue solar.
Transitioning to 100% clean energy will require the cooperation of large utilities such as WE Energies, as well as the innovation and flexibility of small private solar enterprises.
“There are a lot of competing and overlapping interests,” Huebner says. “At RENEW Wisconsin, we are focused on growing renewable and clean energy technologies in the state. There are always a lot of complexities as we do this, but, in general, we are finding a lot of success. Those kinds of interests are coming together more and more, but we’ve gotten sticking points like Solar Now versus the third-party ownership. As we still are at the foundational phase of this growing industry, hopefully we can get this resolved and create some clarity that will help all different types and ownership models of solar growth.”
As small solar thrives and grows, however, large utilities drag their feet in making the transition to 100% clean energy, largely for financial reasons. Large investments for coal plants can take decades to get off the books and this impedes investment in renewable energy, Huebner says. In Colorado, for example, legislation to help refinance and retire coal plants sooner rather than later has been introduced. Twenty other states have used similar strategies to help close down coal-burning plants.
“The concept is creating pathways for the utilities to refinance the big coal-burning power plants,” Huebner says. “A lot of plants when they were built were expected to last 40-50 years. Even a plant that was built 40 or 50 years ago may still have a balance on the books that needs to be addressed. There are number of coal and natural gas plants that are going to need some sort of mechanism to get those more swiftly retired and get to more solar and wind power facilities.”
Carbon Tracker, a London-based think tank that analyzes the impact of the transition to renewable energy on capital markets and the potential investment in high-cost, carbon-intensive fossil fuels found in a recent study that 42% of global coal capacity is already unprofitable because of high fuel costs; by 2040, that could reach 72%. Meanwhile, the price of onshore wind and solar power continues to fall.
The study found that it costs more to run 35% of coal power plants than to build new renewable generation and that, by 2030, building new renewables will be cheaper than continuing to operate 96% of today’s existing and planned coal plants. In the US, closing fossil fuel operations and replacing them with renewable energy could save $78 billion, while China could save $389 billion and the E.U. $89 billion.
