A New Foray Into Community Solar in Eastern Iowa
by Michael Schmidt on Tuesday, October 26, 2021
At the end of September, the Iowa Utilities Board approved Alliant Energy’s first community solar project in Iowa. Alliant has proposed to build a 4.5-megawatt solar array in Cedar Rapids to provide locally-generated energy for its customers. IEC sees this as a good first step into community solar for Alliant in Iowa.
Community solar is not new to Iowa – several municipal utilities (like Ames since 2020, and Cedar Falls in 2016) and rural electric cooperatives (like Farmers Electric Cooperative in 2011 and Heartland Power Cooperative since 2015) have already started community solar programs. Alliant just completed its first community solar installation in Wisconsin, but has not built any community solar in Iowa.
Community solar provides a way for individuals to directly support or invest in renewable energy. Under Alliant’s program, participating customers will pay upfront for a portion of the energy generated by the solar facility ($360 for 250 watts, or $16,920 to offset the average household use of 8,883 kilowatt-hours per year). For the next twenty years, they receive credit on their bill for the amount of energy their portion produces. This lets customers who live in apartments or in shaded areas to directly support renewable energy. Alliant’s estimates showed that the upfront cost would be paid back in savings over 11 to 13 years, so the customers see a net savings over the twenty-year term.
One change IEC seeks to incorporate in future community solar programs is accessibility: the program’s high upfront cost presents a significant barrier for low-income customers. For customers without much savings, breaking even in 11 years is not feasible. Other community solar programs have used a “pay-as-you-save” or “pay-as-you-go” model, in which the customer pays nothing up front. Instead, the value of the energy generated pays for the cost of the solar panels. IEC and the Environmental Law & Policy Center argued that Alliant should use this model for its this community solar project.
Alliant responded that a pay-as-you-save approach would not work because the cost to finance the solar installation was high enough that it would eliminate customer savings. Instead, Alliant used a donation from its nonprofit foundation to pay the subscription fees for 1,000 blocks to the Cedar Valley Habitat for Humanity for local residents.
We hope the community solar model continues to grow in Iowa and that it is designed so that all customers can access it, regardless of income. States with well-developed community solar programs have more community solar generation capacity than all solar generation in Iowa today. There is definitely opportunity for Iowa to grow.
- clean energy
- renewable energy
- solar power