U.S. cities bought more renewable energy than ever in 2020
As the world falls victim to the financial blow of COVID-19, local governments across the United States are under tremendous pressure as cities and counties face severe budget deficits. This requires cutting critical education and infrastructure spending as well as layoffs, holidays and hiring freezes. The loss of critical funds could have seriously hampered the continued progress of US local governments in renewable energy.
Despite the immense hurdles, U.S. local governments bought more renewable energy in 2020 than ever before, according to new data from the Local Government Renewables Action Tracker. Almost 100 cities and counties in 33 states have completed 143 deals, adding 3,683 megawatts (MW) of renewable energy capacity. This is a 23% increase from 2019 and is enough energy to power 811,000 homes per year.
Cities across the United States have signed agreements of all types and sizes, a positive move towards renewable energy that cities must continue to pursue in order to achieve broader sustainability goals. Here are four remarkable ways local governments purchased renewable energy in 2020:
1. Signing of agreements of record size
The biggest solar and wind deals signed by US cities were both announced in 2020. In April, just after announcing its climate action plan, Houston signed a retail contract for a capacity solar power estimated at 492 MW, the largest solar agreement signed by a city. Five months later, the Los Angeles Department of Water and Power added the Red Cloud Wind Farm in New Mexico to the city’s renewable energy portfolio with a 331 MW physical offsite PPA.
These two examples are representative of an overall positive trend: the average size of transactions with local authorities in the United States almost doubled, from 14 MW in 2015 to 26 MW in 2020. Physical off-site PPAs, which represented more of 40% of all transactions by local governments in 2020, helped make this possible by allowing cities to purchase large amounts of electricity and renewable energy certificates (RECs) at agreed prices for periods fixed directly from solar or wind farms. These large-scale offsite purchases can help cities plan better by creating certainty about future energy costs, bringing cities significantly closer to their goals of achieving 100% renewable energy.
2. Collaboration with regional partners
While some cities can get clean energy through physical offsite PPAs, some local governments do not have this option. As a result, they took a different path: working with utilities to access large-scale renewable energy projects that they might not otherwise be able to. In 2020, the city of Charlotte, North Carolina, signed a contract to purchase power from a local 35 MW solar project through Duke Energy’s Green Source Advantage. This program, an example of a green tariff for utilities, allows Charlotte to negotiate directly with a renewable energy developer over pricing and timing, after which Duke Energy supplies the energy to the city. In Arizona, the City of Tempe, the City of Gilbert and the Indian community of Salt River Pima-Maricopa joined the Salt River Project’s Green Tariff Program separately to obtain a small portion of the energy from a local solar installation from 300 MW. In Virginia, Arlington County partnered with Dominion Energy to buy 32 percent of the power produced from a new 120 MW solar farm, while Amazon bought the rest.
In addition to working with their utilities, some cities are establishing public-private partnerships with other local institutions to purchase electricity. The city of Nashville and Vanderbilt University have joined the Tennessee Valley Authority’s green pricing program, Green Invest, to build and purchase solar power from a local 125 MW project. By coming together, the city and the university were able not only to support each other throughout the procurement process, but also to leverage their collective purchasing power to achieve climate goals more affordably and efficiently. .
3. Integration of vocational training and social benefits
Local governments have started to include equity considerations and skills training programs in their renewable energy agreements, showing that renewable energy can help governments meet their social and economic goals, in addition to their climate goals. For example, Denver, Colorado has reserved at least 20% of the solar power from its nine upcoming community solar projects for low and moderate income residents, which will lower their energy bills. Denver is also developing an associated paid training program, which will employ approximately 20 residents during construction.
These agreements prove that cities and counties across the country have made significant progress on climate in a time of uncertainty.
The city of Madison, Wisconsin, has taken a similar approach with its 240-kilowatt solar panel on the local Metro Transit building – the largest in the city’s history. This project was built by GreenPower, a full-time employment and vocational training program that teaches residents with little experience to install solar panels, allowing some participants to secure permanent employment in the industry. Since the inception of the program in 2016, various groups of interns have installed more than 17 systems at city facilities. Together, these facilities represent approximately 80% of the 1 MW solar capacity added by the city to date.
4. Using creative funding approaches
In the face of the COVID-19 crisis and the financial fallout that has resulted from it, some local governments and regional authorities have turned to innovative financing approaches to help move their transactions towards completion. One example is the Washington Metropolitan Area Transit Authority (WMATA) in the Washington, DC area. Faced with subsidy cuts due to COVID-19, WMATA decided to lease an area of 13 football fields in four of its train stations for the installation of 12.8 MW of solar power on carports and awnings . With this deal, WMATA is not only hosting one of the largest community solar projects in the United States, but has also created a funding stream for itself until 2047.
Other governments, such as Knox County, Maine, have chosen to use federal funds received through the Coronavirus Aid, Relief, and Economic Security (CARES) Act in support of renewable energy. After years of envisioning a solar farm, the county was finally able to purchase its own 5MW solar installation right next to the Knox County Regional Airport via a $ 17.9 million grant, setting itself up for a return on investment of nearly 70% which will help the airport become financially independent of taxpayers.
Maintaining the post-COVID-19 momentum
Cities and counties across the United States have purchased unprecedented amounts of clean energy over the past year, despite enormous difficulties due to the COVID-19 pandemic. These examples from across the country – cities large and small, rural and urban – demonstrate both the ambition and the ingenuity of local governments in their continued fight against climate change. Signing larger contracts helps local governments meet their climate goals more efficiently, while using a variety of funding sources makes more clean energy projects possible. Partnering with utilities and local buyers, in turn, can help cities access large-scale projects and deliver greater economic and climate benefits. Finally, including social and equity considerations in renewable energy plans can also create jobs and support low- and middle-income communities.
More importantly, these agreements prove that cities and counties across the country have made significant progress on the climate in these uncertain times. This has made 2020 a historic year for renewables in the United States, but there is still work to be done. Local governments must maintain this momentum and remain steadfast in their efforts for a cleaner, more sustainable world after COVID-19.