CENTRAL CITY — A town shy of 3,000 residents offers the best case study in how to implement solar energy in a public power state. In 2014, the southeastern Nebraska town of Central City launched the first community solar farm in the state.
At a total investment of $600,000, the 100 solar panels provide 200 kilowatts of power to residents. Last year on Earth Day, U.S. Department of Agriculture rural development officials awarded plaques to three Central City businesses instrumental in the project.
City administrator Chris Andersen said that the immediate costs of solar energy had always been a deterrent for smaller municipalities in the past. In recent years, however, Andersen noted that solar energy prices had dropped enough to be economically compelling to individual homeowners. Cliff Mesner, the first private investor in the project, started out as one such homeowner.
Menser, who serves as Central City’s attorney and economic development director, had sought to install a few solar panels on the roof of his home. Mesner discovered he could afford a lot more panels by moving the system to the ground. Soon, he was considering 100.
He called Andersen for city approval. The two agreed on a location switch: a patch of land on the outskirts of town owned by Mesner Development, away from residential areas. Andersen tasked Mesner with rallying more private investment, and soon six businesses were involved.
“I started out thinking that I’d put up eight panels, and it turned into 800,” Mesner said.
Since Central City began its community solar project in 2014, Mesner Development has begun work to install similar 100-panel projects in Venango and Scottsbluff. In 2016, Lincoln Electric System opened the first utility-scale solar installation in the state, generating 5 megawatts of power. This year, Fremont began construction on a solar farm of more than 3,000 panels.
Central City first experimented with solar when it purchased 25 kilowatts of power from Mesner’s original panels.
The private sector in Nebraska is forbidden by law from selling custom-generated power to anyone other than the public power entities. But, unlike the private sector, public utilities are not eligible for federal tax credits. Mesner Development, for example, was awarded tax credits from the USDA’s Rural Energy for America Program. The pilot project cost Mesner roughly $50,000 where it would’ve cost the city $75,000.
“With this pilot project, the numbers finally made sense,” Andersen said.
The city soon after received a $150,000 grant from the Nebraska Environmental Trust for its solar ambitions. The grant coincided with a boom in the solar market. These two factors meant the city’s projected cost of investing in solar energy had plunged from $3 per watt to $1.20 per watt. It became cheaper for Central City to install its own panels on Mesner’s land than to buy the power from Mesner and other private producers.
Without the the Nebraska Environmental Trust grant money, Andersen said that the fate of the project would have ultimately been decided by local appetite.
“The question would’ve become, are people willing to pay higher rates for a while, knowing that in 10 to 15 years they would start saving a lot of money?” he said.
Solar is a fixed price commodity, unlike fossil fuel commodities that fluctuate in price over time. It was the financial boon of being able to fix commodity costs that drove Central City to the project, not environmentalism, Andersen said.
“We never do anything to be green,” he said.
“We’re not looking for a green sticker. We do things because they are smart business decisions.”