Solar PV helps local governments monetize infrastructure | Centrica Business Solutions
How local governments can monetize infrastructure

How local governments can monetize infrastructure

Installing a solar PV system can enable local governments to maximize value from existing infrastructure like rooftops, parking lots, and grounds.

The community’s attitude toward the environment is changing, and the federal government has set clear net zero goals. On a local level, governments across the country – like cities, counties, parishes, special districts, towns, villages, water plants, and wastewater plants – are taking steps to mitigate their carbon emissions and embed sustainability across their municipal facilities and operations. They are developing sustainability and carbon reduction roadmaps – with some communities targeting 100% renewable energy or 100% carbon neutrality by a set date.

Local governments have an opportunity to be leaders in the energy transition. In order to do so, they need to take a hard look at their infrastructure to meet carbon targets and conserve natural resources. This priority requires a comprehensive approach that considers all aspects of infrastructure – and how infrastructure improvements and energy asset upgrades interact in complex ways to reduce energy consumption and carbon emissions in municipal operations.

Increasing energy efficiency is one tactic. Upgrading lighting to LED, replacing inefficient HVAC systems with modern equipment, implementing building automation systems to optimize energy usage, and increasing water efficiency are all necessary measures. They reduce energy consumption and carbon emissions and conserve natural resources. However, once efficiency measures are identified and implemented, another key tactic is to offset a percentage of grid consumption by generating clean energy on-site.

Unlocking value from infrastructure with solar PV

Many local governments have existing infrastructure that they can transform into sources of on-site energy generation. Of course, this depends on several factors like location (city versus suburban, for example). Still, large spaces like rooftops, parking lots, or empty ground spaces can be appropriate locations to install a solar photovoltaic (PV) system.

By installing solar PV panels, local governments can unlock value from their rooftops, parking lots, and grounds. Solar PV panels deliver energy cost and carbon savings by offsetting a percentage of the site’s energy consumption from the grid with lower-cost, on-site generated renewable energy instead. Local governments can lock in a predictable energy rate for the lifetime of the solar PV system, enabling them to better forecast energy spending and operating expenses.

Local governments have a fiscal and social responsibility to ensure the well-being of their constituents and build thriving communities. By installing solar PV panels, local governments can benefit their community in the following ways:

  • Visually demonstrate to their community that they are committed to the environment, a sustainable future, and the health and well-being of their constituents, as energy produced from solar PV technology doesn’t emit CO2 or other harmful greenhouse gases
  • Lead by example in their community and offer educational opportunities to encourage their constituents to adopt solar on their own properties
  • Power publicly available spaces with renewable energy
  • Offer shade and protection to parked cars when installing carport solar
  • Reduce government costs and maximize taxpayer dollars

For these reasons, generating renewable energy on-site instead of consuming energy from the grid makes solar an attractive solution for local governments to reduce energy costs and carbon emissions while simultaneously delivering benefits to the community. Another aspect that makes solar an attractive solution is participating in net metering, which enables local governments to monetize their assets.

How net metering benefits local governments

One of the key drivers for solar adoption across the U.S. has been strong net metering policies at the state level. Solar incentive programs like net metering are designed to “incentivize” the adoption of solar PV systems. Generally, the earlier you adopt solar, the more lucrative the benefits – and the sooner you can begin reducing your grid consumption and offsetting it with less expensive, on-site generated renewable technology.

Net metering is a valuable solar incentive because, unlike solar tax credits that provide valuable one-time benefits, net metering delivers ongoing dividends over the lifetime of a solar PV installation. Net metering is a billing mechanism available in many states that credits local governments who install solar PV for excess solar electricity that their solar PV system generates and sends back to the grid. While net metering programs vary from state to state, the overall process is straightforward.

Here’s how net metering works:

  1. The local government sends their excess solar electricity to the grid – this usually happens when their solar PV system is generating more electricity than is being consumed at the site or when excess energy isn’t being stored in a battery energy storage system.
  2. The local government receives payment from their utility company for this excess solar energy in the form of bill credits that are applied to their monthly electric utility bill, lowering their future energy costs and operating expenses.

Net metering can help to speed up the payback period from installing a solar PV system by providing a continuous stream of credits month after month that – in combination with reduced grid consumption by generating renewable energy on-site – lower future electricity bills from the grid. That’s that much more energy cost savings that local governments can invest in the services they provide to their community.

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Integrating solar into your energy strategy

While solar is an attractive energy generation solution, local governments must consider where installing solar fits into their overall strategy. For instance, it is essential to understand the scope of energy infrastructure upgrades available to help local governments reach energy cost and carbon reduction goals. It is also important to understand how the components interact with each other to reduce energy costs and carbon emissions to deliver maximum impact.

For instance, installing a solar PV system without first addressing energy conservation measures will not yield the most cost-effective solar PV system. The system would be oversized for the energy needs of the site. In addition, under various financing mechanisms, energy savings from energy conservation and efficiency measures may even pay for renewable technologies like solar PV, funding the cost of installation and even enabling a net-neutral project. Nobody likes to spend more – addressing energy conservation first enables more advanced technologies like solar PV to be right-sized for the site’s energy needs.

Solar can be a valuable component of a comprehensive energy strategy and can serve as a launch pad for additional improvements across infrastructure, such as:

  • Battery storage – by combining solar PV and battery storage, local governments can charge their batteries with solar energy and utilize the stored energy during peak price periods, generating cost savings through peak shaving to support demand charge management, as well as time-of-use cost-shifting to reduce energy charges.
  • EV charging – installing EV charging infrastructure is a great way to add value to the community and can even be an additional source of revenue. However, it does involve an increase in energy site load – energy requirements can be met by generating and storing renewable energy on-site.
  • Microgrids – a resilient energy supply is becoming more critical for local governments, and traditional sources of resilience are not sustainable or environmentally friendly. However, microgrids that include a solar PV system, battery storage, and generators are a modern, more forward-focused solution to meeting resilience needs.

Getting started

Partnering with an Energy Service Company (ESCO) like Centrica Business Solutions can help local governments navigate the complexity of implementing multiple technologies, ensure proper deployment to fully maximize infrastructure, and take advantage of all available opportunities like net metering. We follow a ‘cut, convert, complete’ approach to energy implementation, focusing on energy conservation before energy generation. We then help you fulfill any remaining carbon reduction needs or energy requirements with additional solutions like microgrids, carbon offset programs, or virtual power purchase agreements.

We will work with you to deliver a comprehensive energy strategy that fully maximizes your energy and infrastructure and helps you reduce the daily cost of operational processes and meet energy cost and carbon reduction targets. We can help you transform existing assets – rooftops, ground spaces, or parking lots – into sources of on-site renewable energy generation and leverage incentives like net metering to drive cost savings further. We support you at every step of your journey, from understanding your energy goals to optimizing your solution for your available space. We customize every solution to your needs to maximize efficiencies, energy generation, and savings.

Contact our team today to get started. We will perform a feasibility study and work with you to identify areas for energy and infrastructure improvement, scope what solutions and technologies to implement to maximize infrastructure and define a roadmap.