On Ann Arbor’s Energy Agenda: Carbon, Solar

Sept. 3 city council agenda includes resolutions on "community solar," call for retirement system to divest from fossil fuel companies

Two energy-related items will appear on the Ann Arbor city council’s post-holiday agenda next week.

solar panels ann arbor

From a recent application to Ann Arbor’s historic district commission to allow the addition of photovoltaic panels, possibly in conjunction with existing thermal panels. A resolution on the council’s agenda would direct city staff to work with DTE to develop a pilot program that would benefit people who, unlike this homeowner, don’t have solar access.

One of those items calls on the city’s employee retirement system to divest from the top 200 publicly traded fossil fuel companies.

The second resolution would direct the Ann Arbor city staff to work with DTE to develop a pilot program for a “community solar” project – an initiative that would allow a group of people or businesses to purchase shares in a solar energy system, not located at the site of their electric meter.

The items appear on the council’s tentative agenda for Sept. 3, 2013, which is shifted to Tuesday from its regular Monday slot due to the Labor Day holiday.

Both resolutions were sponsored by the city’s energy commission, a 13-member group with the responsibility of overseeing city policies and regulations on energy and to make recommendations to the city council.

Divestment from Fossil Fuel Companies

An energy commission resolution passed on July 9, 2013 recommended that the city council urge the city’s employee retirement system board to cease new investments in fossil fuel companies and to divest current investments in fossil fuel companies within five years. The resolution defines a “fossil fuel company” to be any of the top 100 coal companies or top 100 gas and oil extraction companies. The top three coal companies on the list are: Severstal JSC; Anglo American PLC; and BHP Billiton. The top three gas and oil companies on the list are: Lukoil Holdings; Exxon Mobil Corp.; and BP PLC.

The basic consideration of the resolution is the importance of the role that greenhouse gas emissions play in global warming. The resolution cites the city of Ann Arbor’s Climate Action Plan, which has a goal of reducing greenhouse gas emissions by 25% by 2025 and 90% by 2050. The resolution warns that fossil fuel companies have enough fossil fuel reserves that, if burned, would release about 2,795 gigatons of CO2. That’s five times the amount that can be released without causing more than 2°C global warming, according to the resolution.

Responding to a query from The Ann Arbor Chronicle, chief financial officer Tom Crawford – who sits on the board of the employee retirement system in an ex officio capacity – indicated that it would be a challenge to identify the specific companies related to the retirement system’s investments. That’s because the retirement system’s trust fund has investments in indexes, funds, and funds of funds.

From the most recently available retirement system’s annual report, for the year ending June 30, 2012, the total net assets available for benefits stood at $399.7 million. The two largest categories of investment shown in that annual report are domestic equity ($156.5 million or 39%) and investment grade fixed income ($125 million or 31%).

The investment policy committee of the employee retirement system is scheduled to meet on Sept. 3, 2013 before the council votes on its resolution.

As of the spring of 2013, the city of Ann Arbor’s retirement system has about 650 active members and about 960 retirees or beneficiaries.

Community Solar Pilot

A second July 9, 2013 resolution approved by the energy commission recommended that the council direct city staff to work with DTE to develop a “community solar” pilot program, which would allow people to invest in a solar energy system, even if the energy that’s generated would be located off-site from their own electric meter.

The goal is to create a program that would assist the work of the Great Lakes Renewable Energy Association (GLREA), which has a grant to work statewide, investigating the feasibility of and constraints facing this collective approach to alternative energy generation. As an example of this approach, the resolution the council will be asked to consider cites the Cherryland Electric Cooperative in Traverse City.

The council’s resolution asks that details of a pilot program be ready for consideration by the Michigan Public Service Commission by March 31, 2014.

The goal of community solar is to allow people who don’t own the property where they live, or whose own property is shaded or poorly oriented for solar energy production, to support the production of solar energy.

Ann Arbor city energy coordinator programs associate Nate Geisler told The Chronicle that no specific locations for the installation of a solar facility have been pinpointed, but that will be part of the development of a community solar pilot program. Geisler will be the city staff member who would work with DTE on development of the pilot program, if the council approves the Sept. 3 resolution.

Interest in solar energy production in the Ann Arbor area could be measured by participation of 64 Ann Arbor homes and businesses in DTE’s SolarCurrents, which was a two-year program (ending in May 2011) that offered incentives for installing solar photovoltaic panels. The program provided rebates of $2.40 per watt of installed solar photovoltaic power and payments for every kilowatt hour produced.

Among the participants in the SolarCurrents program was Matt Grocoff, whose net-zero home on Seventh Street has received a fair amount of publicity. Grocoff told The Chronicle that the price of installing solar energy has dropped from the time he renovated his historic house – from about $7 per installed watt to about $3.30.

Interest in pursuing photovoltaic solar energy generation on residential rooftops continues to be an option, even in Ann Arbor’s historic districts – as Ann Arbor resident Bob Kuehne submitted an application last week (on Aug. 23, 2013) for such an installation. Kuehne’s application indicates that one option he’s considering is to remove two existing thermal panels in favor of installing photovoltaic panels over the entire roof. The house stands in the Old West Side historic district.

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  1. By Steve Bean
    August 26, 2013 at 3:29 pm | permalink

    “…it would be a challenge to identify the specific companies related to the retirement system’s investments… because the retirement system’s trust fund has investments in indexes, funds, and funds of funds.”

    That’s not a difficulty at all. Sell them all. They all contribute to and promote fossil fuel consumption (to varying degrees), and they’ll all be losing value during the deflationary credit collapse that’s underway.

    We’d be far better off investing those funds in the community solar effort, possibly via the city’s PACE program (if the state would enable its use for residential installations).

    Rounding down the cost per installed Watt slightly to $3, $300 million from the retirement fund (about 75% of the total) would cover 100 MW* of installed capacity, create numerous jobs, keep more money in the local economy, make our community much more resilient to power outages in the future, make local housing more affordable (keeping more people in their homes and paying property taxes), and reduce GHG emissions, all with a guaranteed positive return to the retirement fund. The county could follow suit. As payments came back to the city, the retirement board could decide whether to reinvest in the effort or shift into some other investment. Simultaneous investment in local energy efficiency would make the solar investment go even further.

    What will keep us from making such an eminently wise choice? (Notice that I say “will” rather than “would”. Now why would I do that?)

    *100 MW is enough capacity to power 100,000 average American homes (or at least twice as many efficient homes, or something like ten times as many very efficient homes). Since Ann Arbor has less than half that many households, the remainder could be available for powering businesses.

  2. August 26, 2013 at 3:46 pm | permalink

    As I understand (and I’m not at all expert), there are currently regulatory barriers to community solar projects. There are also technical challenges in obtaining solar power from one’s own system directly and storing it (rather than sending it back to DTE and receiving a reduced rate). Battery technology is still catching up.

    There is already an effort to put together a community solar project for my neighborhood in Northwest Ann Arbor. Many of us received emails inviting us to an informational meeting at the 2nd Baptist Church tomorrow (August 27) at 7 p.m. I don’t know how large the fellowship room is.