Cleantech Market Intelligence
In Colorado, a New Solar Model Takes Root
A few years ago the Yampa Valley Electric Association, the rural cooperative that serves communities across northwest Colorado, including the Steamboat Springs ski resort, signed an agreement with a company called Clean Energy Collective to build a community solar garden in the valley.
Headquartered in Carbondale, Colorado, Clean Energy Collective (CEC) has helped pioneer the community solar model, in which individuals and businesses can buy shares in solar power generation facilities rather than owning or leasing the solar panels themselves. Paul Spencer, the founder and CEO of the company, calls it “solar for the masses.”
CEC signs a power purchase agreement (PPA) with the incumbent utility then pre-sells solar generation capacity in the form of subscriptions and finances construction using the PPA and the subscriptions, essentially, as collateral. Subscribers don’t necessarily get the actual power flowing from the solar array; those electrons go onto the local power grid and appear as renewable energy credits on the customers’ bills. CEC makes money by charging subscribers a slight mark-up over the cost of producing the power.
Under the Smokestacks
As a way of shifting away from the antiquated, centralized, and coal-dependent power grid, community is a powerful model. Founded in 2010, CEC now has 45 facilities spread across 19 utilities in 9 states. Spencer expects the number of facilities to double by the end of 2015.
In the Yampa Valley, though, CEC had a problem.
Craig, about 40 miles west of Steamboat in the mesa country of far west Colorado, has always been a coal town. Most of the solar customers would certainly be in Steamboat, at the eastern end of the valley. But land in Steamboat is not cheap, and CECs business model is based, in part, on building solar arrays without paying too much for the land. Proximity to customers was a lesser concern.
As it turned out, there was an ideal site in Craig – literally in the shadows of the Craig power station’s smokestacks. CEC quickly signed up enough people to take 30% of the solar power the garden would produce. That’s when the problem arose.
The land the solar garden was on was owned by the city of Craig, but the mineral rights were held by Tri-State Generation & Transmission, the operator of the Trapper Mine outside town. Tri-State officials said the rights were unlikely to be exercised — but they declined to formally cede them. What’s more, some city council members were against the idea in principle, believing that it was harmful to the interests of the coal industry. Spooked by the mineral rights issue, the title company on the land deal washed its hands of the deal. For a time, it appeared that the solar garden was dead.
Bridging the Divide
Paul Spencer and Terry Carwile, the mayor of Craig, weren’t ready to give up. “We begged, borrowed, and stole,” Spencer told me, chuckling. “We had to find a way to work around the mineral rights issue, and the town helped us do that.”
By the fall of 2014, a new, more amenable title company had been found, the deal was back in place, and CEC had resumed signing up customers. In coal country, a truce had set in.
“Solar is not the replacement for coal,” said Spencer. “It’s another power solution that helps build a low-carbon future. In some small way, this project is an initial way to bridge the divide between Craig and Steamboat – between the coal-producing world and the renewable energies of the future.”