The City of Bloomington, Indiana decided to diversify the energy supply at municipally owned facilities. Using a guaranteed energy savings contract (GESC), the City has installed 2.1 MW of solar energy, as of early 2020, at 32 locations with more on the way. The City also worked with the Solar Indiana Renewable Energy Network (SIREN) to support the installation of over 1.8 MW of solar capacity at 240 residential homes between 2017 and 2019.
| Action | Applicable Resources |
|---|---|
Procure a GESC
|
|
Coordinate installations with the contractor
|
|
Work with local groups to install residential solar
|
In 2016, the City of Bloomington’s Office of Economic and Sustainable Development explored the viability of a GESC to facilitate renewable energy installations and energy efficiency upgrades at City facilities. Installing solar at City government and residential locations was one option being considered to meet the City’s 5 MW renewable energy goal community-wide. Bloomington began by posting a Request for Proposals (RFP) to find suitable partners for an energy savings agreement.
Once the City selected a partner to work with on the GESC through a competitive bid process, the parties began looking at what options for renewable energy and/or energy efficiency existed that would be feasible for the City. As the City and their contractor started to evaluate options, the Indiana legislature passed SB 309 in 2017. SB 309 changed the rate of return for solar energy and whether the electricity is sold back at market rate or wholesale. According to the new legislation, solar installed through 2022 would still receive the original net metering benefits of selling at retail value until the year 2032, after which point any excess energy could be sold back at wholesale value. Solar installed prior to the end of 2017 would receive the original net metering benefits until 2047, creating an incentive to get solar panels installed before 2017.
A guaranteed energy savings contract, or GESC, is an agreement between a certified provider and a building owner. GESCs are a funding option allowed by the Indiana Department of Local Government Finance that can be used to reduce the energy and operating costs of a building or a group of buildings. By using a GESC, the energy efficiency/renewable energy company pays the upfront capital costs. The local government uses the savings generated by the project to pay back the investment over a period of no more than 20 years. If the savings are not achieved, the provider must reimburse the local government for the difference between the guaranteed savings and the actual savings. Local governments in Indiana that use a GESC do not need to do an RFP, however, it can be useful depending on the circumstances. Learn more about GESCs from the Indiana Department of Local Government Finance and from the Environmental Resilience Institute webinar “Funding and Installing Solar in Your Community.”
Bloomington decided to use their GESC to install solar panels in part due to the bill, but also because it made sense fiscally. Using the GESC in 2017 to install solar panels instead of a different energy efficiency project ensured the City would receive a higher rate of return from any excess energy they sold back to the grid from their panels.
The City created its budget and approach in the RFP response and the subsequent contract. The criteria for choosing the contractor were the quality of deliverables, qualifications and experience, the capacity to implement the GESC, and project management. The Controller’s Office served as the point of contact with the banks and for any funding decisions.
Bloomington chose Energy Systems Group from the RFP process. Energy Systems Group worked with the Utilities, Parks and Recreation, and Public Works departments, to identify solar panel locations, costs, expected energy production, and how to meet the GESC requirements of meeting energy savings. Ultimately, the City and the contractor determined suitable sites on municipal facilities throughout Bloomington at multiple locations (see the solar installation map). Given the SB 309 timeline, the City worked to complete and connect its solar installations to the grid before the end of 2017.
Since the City was using a GESC, the contractor was responsible for physically installing the solar panels and managing the project. The City's role was to communicate with the contractor throughout the project to ensure compliance with project requirements.
As the projects were being installed, some of the planned locations had to be changed due to unforeseen installation difficulties, additional costs, and issues producing the amount of energy that was anticipated. The changes led to a redistribution of solar panels so they could be placed in more cost-effective locations. Panel siting was done on a case by cases basis, depending on roof slope and orientation.
In collaboration with the City, the Solar Indiana Renewable Energy Network (SIREN) – a project of the local nonprofit, Center for Sustainable Living – developed a program called Solarize Bloomington to accelerate the adoption of residential solar energy. Every year, SIREN issues an RFP for companies to install solar. Based on the RFP, SIREN then selects a contractor who offers volume pricing to consumers to drive down the cost of installation. Whole Sun Designs, a local company, has been a partner for several years and has grown significantly as a company during that period, in part because of this program.
The City of Bloomington and SIREN jointly funded Indiana Solar for All to help fund installations for people who are traditionally unable to afford the upfront cost of solar. The program assesses a small surcharge on each watt to help lower-income residents afford solar. Participating residents volunteer on solar installations in exchange for a reduced cost on their own solar panels. As of early 2020, 14 households have participated in the Indiana Solar for All program.
The City and SIREN collaborated by issuing joint press releases, mailing announcements in municipal water bills, and putting announcements on social media and in local newspapers to attend information sessions. These announcements direct residents to register online for an in-person meeting. At the meetings, residents hear a 20-minute presentation about the value of going solar and about the volume pricing discounts through the Solarize program. The meeting presentations are given by SIREN volunteers, and a staff person from a selected contactor is present to cover technical details. After the meeting, interested participants are asked to complete a form with information about their average energy use.
The City used a GESC to finance their solar installations. The face value of the lease is $12,959,301. However, the amortization schedule, which includes interest, has total payments over the life of the rent-to-own lease at $17,456,983. Bloomington will pay off the amount using the energy savings from solar energy under the terms of the GESC.
The Economic and Sustainable Development Department provides about $1,000 annually for printing water bill inserts. Costs incurred by SIREN have been less than $1,000 annually for printed materials, advertising, info-tube holders and yard signs, which are placed at homes that have recently installed solar. The costs for SIREN were paid with donations.
The City began looking at the viability of a GESC project in 2016, and the solar project got underway in 2017. The first phase of the project was completed later that year. The City is engaged in ongoing efforts to add more solar installations in Bloomington.
Solarize Bloomington offers multiple information sessions from March through November each year, and the program was still operating as of fall 2019.
As of early 2020, Bloomington had installed solar energy systems at 32 City locations, providing an estimated 2.1 MW of solar capacity and an additional 1.8 MW of solar capacity has been added through their partnership with SIREN. The City also released an online solar dashboard that allows anyone to see the current and past renewable electricity generation for municipal facilities in an interactive manner. The City of Bloomington was recognized as an EPA Green Power Partner for municipal solar electricity generation.
The installed solar capacity does not offset the facilities' entire electric use. However, some solar sites generate more electricity than they use. This excess energy is sent back to the grid and the City receives a bill credit through net metering. Between July 18, 2018 and June 19, 2019, the City received a $70,000 bill credit from Duke Energy as a result of net metering.
Monroe County, where Bloomington is located, comprises close to 20% of the individual solar installations in the state of Indiana. When looking at Duke Energy net metering customers in Indiana, Monroe County accounts for 40%.
Additional solar capacity is expected to come online at City facilities, including on the parking garages, and Solarize Bloomington is continuing its program to encourage more residents to install solar.
The City faced a couple of challenges throughout the process. At one point, the City was facing time constraints, and because of the structure of the GESC, the City had limited control over subcontractors. These subcontractors were chosen by the contractor and in some instances were not as experienced in solar installation. At some locations, the subcontractors initially installed panels improperly, without proper protection, or in spots that were unfit for the solar panels. Most of the reason for these issues was a result of the rush to install the panels before the end of 2017. Luckily, a GESC requires the contractor to generate the energy they have committed to under the contract, otherwise, the contractor must pay the difference between the guaranteed savings and the actual savings
Another issue was installing in sites that are considered multi-tenant or multi-retail. These sites are more challenging because each tenant must be considered separate, which requires additional installation and monitoring to properly determine where the energy is going and who is being charged or reimbursed.
Alex Crowley, director of Bloomington’s Office of Economic and Sustainable Development said, “It is important to pick your energy savings partner carefully and know their experience and how they will lean on subcontractors, especially if you are operating under a time crunch.”
Lauren Travis
Bloomington Office of Economic and Sustainable Development
Assistant Director of Sustainability
lauren.travis@bloomington.in.gov
812-349-3418
