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Three Ways Local Governments Can Use Solar Power for Themselves, Part 1: Yolo County

Solar sounds good, but what does it actually look like when a local government decides to set up some panels?

Editor’s note: This is the first part in a three-part series examining how local governments use solar to reduce power bills while achieving environmental goals. Read part two here and part three here.

Yolo County, Calif. — home to 200,000 people and the University of California, Davis — didn’t just lower its electric bill. It turned it inside out.

With perhaps one of the most aggressive programs for deploying solar power for government operations in the country, Yolo County actually generates about 50 percent more electricity than it uses. According to County Administrator Terry Vernon, the county started deploying solar panels in its general services department in 2010. That means it actually makes money from selling electricity to a utility on top of essentially zeroing out its own power expenditures.

The program, which Vernon said was born of both concern for the environment and a desire to lower government costs, has led to 7 megawatts of solar capacity on government roofs and on government-owned ground. Not only does Yolo County get to reap the benefits of paying minimal electric bills, it also gets to avoid the peak demand charges that come from having a large utility account.

“I did an analysis on if we did nothing versus the 7 megawatts and we actually reduced our electric bill by $2.7 million (over multiple years) and then we generated revenue in excess of $600,000,” Vernon said.

Yolo County’s approach is unique. It takes advantage of a state environment that includes net metering, where customers who generate their own power can sell it back to utilities for as much as they buy it for. That structure means solar customers — including homeowners — can more easily justify the up-front cost of solar panels even if they are generating the most power when the roof-owner isn’t using it.

But the county took advantage of other programs too.

“We did net energy metering, we did bill crediting on a large scale and we sell power to the utility,” he said. “And that was a first [for county governments].”

The trick, he said, was securing the financing for up-front costs. From the very first day of operation, the county wanted the panels to be at least revenue-neutral. Instead of dipping into capital accounts, Vernon turned to financing mechanisms — credit bonds, state energy commission loans, qualified energy conservation bonds from the U.S. Department of Energy and the like — and piled on so much generation capacity that the arrays would, even with conservative estimates, create revenue for the county.

For example, Vernon was counting on the 1 megawatt system that has powered the justice campus since 2010 to generate $93,000 per year after paying off debt. In its first year, it generated $162,000 instead.

“That’s an attorney’s salary, or a captain’s,” he said.

The tariff rates Yolo County locked in when it set up the panels means that other government entities might not be able to do things exactly the same way. But Vernon still thinks others can take the same tack as Yolo when thinking about going solar.

“The project I did can be duplicated in a smaller or larger fashion. It can’t be duplicated exactly, but for the most part you can duplicate almost everything that I did,” he said. “The way that we [generate] electricity and buy and sell it, that’s all changing. But a city, a county or an agency could put in a solar array and with the right approach and the right financing and everything else, they can generate a revenue stream just like I did ... and they can reduce their electric bill substantially.”

However, that’s just one approach local government entities are taking to use solar panels in a way that works out in the government’s favor. Next, this series will look at two city governments that found ways to benefit from solar under different circumstances than Yolo County’s.

Correction: A previous version of the story labeled a multiple-year savings figure as annual.

Ben Miller is the associate editor of data and business for Government Technology. His reporting experience includes breaking news, business, community features and technical subjects. He holds a Bachelor’s degree in journalism from the Reynolds School of Journalism at the University of Nevada, Reno, and lives in Sacramento, Calif.