Arrays of solar panels soak up the sun’s rays along Saltillo Road.
While solar panels are nothing new to Lincoln, this project represents a new mile post in photovoltaic solar generation for the Capitol City.
It’s Lincoln's first solar array built by a Lincoln Electric System business customer solely for the purpose of selling electricity to the utility, and is the latest in a surge of photovoltaic solar generation that came online in Lincoln over the past year.
Previous solar installations, all 25-kilowatt capacity or less, were done under LES’ net metering program, which lets homeowners offset their own power usage and sell any extra electricity generated to the utility.
The new business venture comes from a couple of concrete companies in cooperation with Roca-based GRNE Solutions, which is devoted to installing and researching renewable generation options.
The solar system is owned by JAX Properties, a company created by JA Concrete and X Foundations when they bought land for a joint headquarters in 2015.
Jim Ahlstedt Jr. of JA Concrete said the solar array -- which was pitched to them by GRNE Solutions -- makes financial sense thanks to a 30 percent federal tax credit and other incentives. Plus, he said, it feels good to know they’re helping lessen reliance on coal and natural gas, which means fewer climate-warming greenhouse gas emissions.
While a fraction of the size of LES’ 5-megawatt Community Solar installation, the array at 1900 Saltillo Road is currently Lincoln’s largest customer-owned solar installation with a capacity of 100 kilowatts. That ranking won't last long.
Three yet-to-be-announced Lincoln businesses have banded together on an even larger array capable of generating nearly 300 kilowatts, according to Marc Shkolnick, LES manager of energy services.
LES guarantees the rate it pays for power generated by systems with capacity of greater than 25 kilowatts, like the one on Saltillo Road, for 10 years. That promise was key in encouraging businesses to make the investment in expensive solar panels, which generally last up to 25 years.
Jess Baker, co-founder of GRNE Solutions, said a 100-kilowatt capacity system costs between $190,000 and $210,000 to install. After factoring in federal tax credits and other incentives, the system on Saltillo Road will pay for itself in a little under five years at the rate LES is paying for electricity.
But that renewable generation rate is close to changing for solar arrays larger than 25 kilowatts. Once Lincoln reaches a total of 1 megawatt (1,000 kilowatts) of customer-owned generation, LES plans to drop the rate it pays for new projects to half its residential rate. Lincoln currently has about 900 kilowatts of capacity existing or soon to come online.
Residential customers always will be able to offset their own electric use at the same rate at which they purchase electricity.
LES, which revamped its rate schedule for customer-owned generation last year, saw a surge in 2016 of new solar arrays, although figures are still modest compared to states such as California which have much more aggressive incentive and promotional programs.
“Last year, 2016, we had 18 customer projects that were completed, which represents 25 percent of all projects (in Lincoln) since 2002,” Shkolnick said. “To have one-fourth of all of your projects done in one year shows a definite uptick in activity.”
A combination of things likely led to the boom, he said, the two most significant being growing awareness and a decrease in purchase and installation costs.
“It’s hard to say if we will see the same number of net-metering projects in 2017, but it's likely that we will see a continued upward trend of customer interest,” Shkolnick said. “The rate of growth is really the great unknown at this point.”
It’s unclear how much of a financial incentive there will be driving solar in the future.
Like electric utilities across the nation, LES in recent years has gradually increased the fixed portion customers pay on their monthly bill and decreased the rate it charges for electricity.
LES previously has said about 75 percent of the price tag for its electricity comes from fixed costs like power lines and salaries.
That national trend is a response to flattening energy demand as homes become more efficient and more customers are generating their own electricity.
“The industry is responding to ensure that we have adequate resources to cover the infrastructure, which goes directly to reliability,” Shkolnick said.
LES also offers a virtual solar program in which customers can buy the rights to solar panels at its 5-megawatt solar farm near West Holdrege and Northwest 75th streets. Customers use the electricity generated by those panels to offset their own use.
The cost now is $685 per panel, but that amount will decrease each year because there will be one fewer year left on the contract with the private owner of the facility, Enerparc.