Garden city 

If you live in a condo, a home shaded by big cottonwoods or an apartment complex, you've long been out of luck in the solar energy arena.

But under a pilot program approved Tuesday by Colorado Springs City Council, residents can now invest in solar and get a utility bill credit — roughly $81 annually at the minimum investment — even if they can't put up panels where they live.

With "solar gardens," locals can buy or lease solar panels that get set up elsewhere, then be rewarded with credits on their energy bill for the amount of power the panel produces for Colorado Springs Utilities. The minimum investment is a half-kilowatt, or two panels, which sell or lease for about $1,100. Educational institutions can also invest in the program.

This arrangement is the first adopted by a municipal utility in Colorado, and, according to one of the project's young architects, may be unique in the country.

A hint of Apple

Interest has been piqued locally in solar power since the federal government invested millions of dollars in large solar arrays at Fort Carson and, last year, at the Air Force Academy.

But who can front $20,000 for a home solar system? Hardly anyone, David Amster-Olszewski says.

Amster-Olszewski is a Miami native who earned a degree in international business and politics, and developed a fascination for renewable energy, at Colorado College. After his 2009 graduation, he started working at SunPower in California and came to realize that 85 percent of people who want solar power can't get it because their house lacks enough sun exposure; they live in condominiums that don't allow residents to add panels; or they simply can't afford it.

That motivated him to start SunShare, which he decided to launch in Colorado Springs. After the Colorado General Assembly enacted legislation to enable Xcel and Black Hills Energy to accommodate solar gardens, Amster-Olszewski went to Springs Council President Pro Tem Jan Martin and asked, "Why not here?" And the idea wound up being well-received at the Springs' municipally owned utility.

Anticipating Tuesday's "yes" vote — which ended up being unanimous — Amster-Olszewski and his partners hosted a rally of sorts last week at the Thirsty Parrot that drew about 130 people. As prospective clients munched on shrimp and sipped cocktails, former Councilor and mayoral candidate Richard Skorman warmed up the crowd.

"Wouldn't it be great to look around and see solar panels everywhere?" Skorman said from the stage. "Wouldn't it be great not to have Drake Power Plant some day, not to have 25 coal trains a day coming down the tracks?"

It's a stretch to think 254-megawatt Drake could be mothballed, considering that SunShare's array of 2,200 solar panels spread over two acres at an as-yet-undisclosed location will produce only a half-megawatt, enough energy to power about 110 homes. But Amster-Olszewski thinks solar could eventually comprise up to a quarter of the city's nearly 1,100-megawatt generating capacity.

That optimism was on display at the party when Amster-Olszewski, in a T-shirt and jeans, made like a young Steve Jobs hawking new Apple technology. He told the crowd that an investment of $1,100, requiring a deposit of only $110, will earn an annual return of 9.7 percent over the panels' 20-year lease term.

Competition likely

In an interview at Skorman's coffee shop a few days later, Amster-Olszewski says his company needs $700,000 in Utilities rebates to make the $1.5 million project work. He hopes to secure the $450,000 left in this year's rebate pool and supplement it with an allotment from next year's pool, budgeted at $1.5 million.

But SunShare likely will face competition from other companies. One may be Clean Energy Collective, which sells (rather than leases) panels under a similar business model. In operation since June 2009, the Carbondale-based firm has built two solar gardens in western Colorado and is planning others in Colorado and elsewhere. SunShare, by contrast, hasn't built one yet.

CEC owner Paul Spencer calls the city's launch into solar gardening a "fantastic idea and great achievement," but he has a few quibbles. First, the minimum purchase is two panels; the minimum, Spencer argues, should be one panel, so that customers can get in on the savings for as little as $500. Utilities spokesman Dave Grossman says the rules were written to encourage participation without burdening Utilities with too much administrative work.

Spencer also thinks companies that build solar gardens should have to pay an application fee — for other utilities, it's $100,000 — that goes into an escrow fund to pay operations and maintenance and insurance, to assure the project lasts 20 or more years. Amster-Olszewski says requiring an up-front fee might discourage start-up companies who lack significant financial backing. And SunShare, he says, will protect shareholders' investment by setting aside 15 percent of proceeds from panel sales for O&M and insurance.

Spencer also complains that Utilities' tariff calls for the city to grant utility bill credits only for that portion of a project that's been subscribed. It won't pay anything for energy produced by panels that aren't sold or leased, even though Utilities receives the power generated by them.

"I've never seen that as a provision in any other program," Spencer says, who calls it an unconstitutional "taking" of property without just compensation, and a potential violation of federal law that requires utilities to pay for all power generated on their systems at a reasonable rate. "Zero," he says, "isn't a reasonable rate."

Amster-Olszewski says he's not too concerned about that, because he says SunShare's projects will be completely subscribed before they're built. Grossman adds that the rule was designed to discourage speculative projects, and Utilities attorney Ken Burgess disputes that it's unconstitutional.

What lies ahead

For now, neither Clean Energy Collective nor SunShare can make a project work financially without the rebate and the tax credit. But Amster-Olszewski says it won't be long before solar won't need that kind of subsidy, because of the declining cost of solar panels. "We will be cost-competitive within four to five years without rebates and tax credits," he says.

Solar becomes even more attractive, Skorman says, if one considers the hundreds of millions of dollars Utilities is planning to spend on emissions control equipment for its coal plants. "This worries me," he says, "because once they do that, coal is the long-term source" of power.

Amster-Olszewski is so confident in his project that he's using no traditional marketing techniques, relying instead on word of mouth and special events like the Thirsty Parrot party. He's leased 250 panels so far, and sounds optimistic that the Springs can overcome its reputation for being less-than-progressive, at least environmentally. A Brookings Institute study ranked the Springs No. 99 out of 100 for clean energy jobs and at the bottom in other clean energy measures.

"We're one of the worst places for clean technology in the country," he says. "And now we're going to be first [with this model]. It's cool."



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