Where solar is concerned, one Kentucky town is breaking new ground for the Bluegrass State. In a state where coal has been king—more than 90% of Kentucky’s electricity is presently generated by coal-fired power plants and Kentucky is third in the nation for coal production—the City of Berea is doing something with solar power that even the big cities of Louisville and Lexington have not tackled. The City is installing PV modules that reduce the amount of outside electricity it must purchase, and is doing so cooperatively with its residents.
The City decided it would install a solar farm on city-owned land and lease the modules to interested parties. Those who were Berea Municipal Utility (BMU) electric utility customers would earn solar credits on their utility bills; and non-BMU customers could choose to allocate their modules’ credits to existing BMU customers.
The initial offering of 60 modules was subscribed in four and a half days, despite a rule that limited each applicant to leasing only two modules. The response was so immediate that the planned second phase of the installation—an additional 60 modules—was moved up to become a part of phase one, and the 120-module offering was subscribed to in fewer than four months.
Each $750 module leased by a customer entitles the customer to all of the electricity that module produces for 25 years, and customers will likely recoup their return on investment over this time frame. In the first year, for example, residential customers Richard and Cheyenne Olson received a credit of $21.78, falling less than $10 short of recouping their $30 annual investment.
Of course, as electricity rates continue to increase, the economics will improve. Joshua Bills, chair of the BMU advisory board who worked on Kentucky net-metering legislation and had a solar installation business, says, “The beauty of the arrangement is that as rates increase, the value of the generation credit increases accordingly. What is a $21.78 per-year credit today could be a $40 or more credit five or 10 years from now.”
But most members are not in the project for the money. Richard Olson, a professor at Berea College, says, “We believe that locally produced renewable energy is essential to the development of a resilient community. The Berea Municipal Solar Farm makes participation in solar energy affordable to almost all Bereans, and is a model that communities throughout Kentucky and beyond can follow.” The Solar Farm’s contribution toward pollution-free power was recognized in April 2013 by the Kentucky Environmental Quality Commission, which presented Berea Municipal Utilities and the City of Berea with a Public Service environmental award.
The 28.2 kW solar farm began operating early in 2012. Already, the city is planning to more than double the size of the installation by adding another 132 modules. The next installation is currently in the planning and permitting phase. With the cost of solar steadily coming down, and the cost of utility energy going up, those who participate in the upcoming phase may find the economics of this solar farm even more fruitful.