Two months after residents of Ann Arbor, Michigan, gave the thumbs up to creating a 100% renewable energy utility owned and shared by the community, the city has secured nearly 75% of the support it need to launch the innovative project.
Last November, 79% of voters in the college town supported the municipality’s proposal for a non-profit energy provider, reports Canary Media. Meant to supplement power from the existing utility DTE Energy, the new “sustainable energy utility” (SEU) will operate by installing solar and battery systems—and eventually, district geothermal—at participating homes and businesses throughout the city of 120,000 residents.
One reason for the program’s popularity is its cost—or lack of it—for taxpayers.
No new taxes will be levied to support the utility. Instead, necessary equipment such as solar panels and batteries—along with energy efficiency upgrades for the town’s aging housing stock—will be purchased in bulk, with the city’s AAA credit rating keeping costs low. Participants will cover the expenses over time through on-bill financing.
The financing will be “structured to match or be lower than the monthly utility bill savings, resulting in a positive cash-flow for the customer immediately,” according to a 2021 city report.
The financing model, known as Property Assessed Clean Energy (PACE), ties payments to the property rather than the homeowner. If the resident moves, the next occupant continues the payments and benefits from the upgrades—a key factor in a town like Ann Arbor, where 50% of homes are rentals. Renters are eligible for all SEU offerings with landlord approval, and even those in buildings unsuitable for solar panels can gain access to renewable power through SEU microgrids or shared battery systems. This power-sharing model, which also applies to homeowners, is the “most radical dimension” of the SEU, Canary Media writes.
Another selling point is the promise of more reliable service, as extreme weather increasingly threatens DTE Energy’s aging grid infrastructure.
To keep costs down from the get-go Ann Arbor will wait till it has secured “an initial tranche of 20 megawatts worth of demand” before purchasing and installing solar panels and batteries on early adopters’ properties.
Just how many participants will be needed to meet the 20-MW threshold remains unclear: it could be something in the neighbourhood of “one or two institutional partners, or a thousand individual residents,” writes Smart Cities Dive.
At latest count, 739 individual homeowners had signed on as SEU customers, Missy Stults, Ann Arbor’s director of sustainability and innovations, told The Energy Mix.
The municipality is currently in conversation with one potential institutional partner: the public school system.
