Solar co-ops in Minnesota are aiming for affordability
By banding together, organizers say they can win lower installation costs from companies and fundraise for members who would otherwise not be able to afford a solar array.
DULUTH -- When Nathan Holst of Duluth first looked into installing solar panels on his home, the cost was prohibitive.
A medium-sized solar array would be around $10,000 for the Woodland neighborhood home he shares with his partner, Sarah, and their two young children.
“And when I did the math, even if we had gotten any kind of incentives, tax credits, the system probably would have paid for itself after 25 years,” Holst said.
And solar panels only last for about 25-30 years.
“We don't really have the cash to do that. We're kind of a lower-middle income family,” Holst said.
Then he found out about a solar co-op launching in the area. In August, Holst had a nine-panel, 3.3 kilowatt system installed on his roof. Now, instead of paying $40-50 per month for electricity, Holst actually made $13 in September because the panels produce more power than he and his family used and the excess electricity is returned to the grid.
That's the point, said Bobby King, Minnesota’s state director for Solar United Neighbors, the nonprofit that’s organized solar co-ops in 12 states, including 13 co-ops throughout Minnesota.
“Through the co-op, people are able to use their purchasing power to get a better price from a solar installer,” King said.
Solar United Neighbors helps co-op members evaluate their roof and location to see if solar is possible there. If it is, then connect them to resources and financial assistance to make the solar array more affordable.
For Holst, that meant rebates through Minnesota Power’s Solar Sense program, which helped cover about a quarter of the installation costs, while grants from Solar United Neighbors covered about half of the cost. That left him with about $2,500 — an amount he can pay off in about five years with money he used to pay toward monthly electricity bills and any additional money through excess energy returned to the grid.
“All of a sudden, then it was like, ‘OK, yes, that’s definitely economically viable,’” Holst said.
Collectively, a lower cost
The co-op is designed to get more people on solar energy, affordably. And there’s strength in numbers.
So, how does a solar co-op work?
Once a co-op has been established, they collectively send out requests for bids to solar installers. When bids are back, they’ll select one company to install all of their individual systems.
The idea is that by showing a number of people are interested, they’ll incentivize installers to lower costs.
Through that process, the co-op ultimately chose Wolf Track Energy, a Two Harbors-based solar installer.
Dane Larson, a solar sales consultant for Wolf Track Energy, said the co-op’s method worked in driving down prices because installers competed for the co-op’s business.
Duluth’s first co-op, of which Holst was a part of, saw 144 people join, with 29 going solar, King said. Now he’s aiming to form another co-op in the area, with a goal of 100 members.
“The interest is so strong,” King said. “We just went right into a second round here.”
Grants, assistance available
Of the 29 people who went solar in the co-op, eight were low-income homeowners in land-trust homes.
That included Holst, who purchased his home six years ago through One Roof Community Housing’s land-trust program, meaning he and Sarah own the home while the Duluth-based housing nonprofit owns the land.
Through some crowdsourcing fundraising, Solar United Neighbors raised money to help offset solar installation costs for low-income people and then partnered with One Roof Community Housing in Duluth to help spread the word.
“Instead of Solar United Neighbors just putting it out there and saying, ‘Hey, anybody that income qualifies: Call us and we’ll see if solar works for you,’ I think Solar United Neighbors identified One Roof as an entity that already would have a handful of income qualified folks and also an established relationship,” said Brooke Tapp, community land trust stewardship associate at One Roof.
Tapp said One Roof helped find interested people, then walk them through available financial assistance.
The organizations were also able to help low-income co-op members get funding through Minnesota Power’s Low Income Solar Program. Additionally, co-op members of all income levels, and anyone installing a solar array, can vie for first-come, first-served rebates to offset installation costs from Minnesota Power’s SolarSense program.
With all that assistance available, the goal was to make low-income co-op members’ investment in their solar array “cash-positive” from Day 1, both King and Tapp said. That is, the member’s monthly loan payment would be less than the value of electricity they’re producing.
“So that from the very beginning, you’re coming out ahead financially,” King said.
When Holst pays off the system in a few years, he hopes to use the money generated from the solar panels to help fund grants that would help more lower-income homeowners install solar arrays.
“I want to make sure other folks have a chance to get this as well,” Holst said.