As the latest IPCC report notes, cities will play a critical role in climate action over the next decade, and many challenges and opportunities for generating more clean electricity lie ahead. After remaining undaunted in their pursuit of renewables in 2020, US cities, counties and tribal governments made 2021 another record-breaking year for renewable energy development in the United States.
New data from the annual update of the Local Government Renewables Action Tracker shows that US cities bought 4,370 megawatts (MW) of clean energy in 2021 — enough to power more than 940,000 US households annually. The 2021 figure surpasses the 2020 total by about 4%, and the number is expected to increase as additional public information becomes available about 2021 deals.
Since 2015, US cities have now purchased more than 18,372 MW of clean power — equivalent to the generating capacity of individual states like Colorado, New Jersey or Minnesota, and enough to power 4 million US households annually.
In 2021, 155 local governments signed 290 renewable energy deals, 25% more cities and 55% more deals than the 2020 record. 110 of them, or about three out of every four, were first-time purchasers. With the addition of these new buyers and deals in 2021, our team has now recorded a total of 1,183 transactions by 723 local governments since 2015.
Here are three overarching trends from 2021 based on some of the most notable deals of the year:
1) On-site renewables are growing sharply. First-time municipal buyers are the main drivers.
For local governments, 2021 was the year of on-site renewables. While this has often been the most popular way of getting clean energy, 2021 saw a major jump (61%) from the previous record of 106 on-site deals in 2019 to 171 in 2021. Further, on-site projects accounted for almost 60 % of total deals in 2021.
New buyers were responsible for the lion’s share of on-site projects — out of the 85 local governments that pursued on-site deals in 2021, 78% were buying renewable power for the first time.
The trend is hardly a surprise. With more and more local governments announcing climate commitments and greenhouse gas reduction targets in recent years, a lot of them have started with smaller on-site deals. This provides a way for cities to gain lower-risk experience with the purchasing process before they dig into bigger projects for their clean energy plans.
On-site renewables projects also allow buyers to offset their electricity bills. For example, the Southern Maine Planning and Development Commission established the Southern Maine Solar Collaborative to help multiple local governments purchase solar together at a lower cost. In 2021, the program installed 5.3 MW of aggregated net-metering solar capacity in five different localities, which helped each municipality involved reach better pricing options and competitive contract terms.
2) Renewables are breaking ground in uncharted territories.
Renewable energy programs and transactions by local governments popped up in a broader range of geographic locations than our Transaction Tracker has reported in the past.
For example, officials in Starkville, MS signed a 30 MW solar deal that will help offset 15% of the town’s annual electricity consumption. This is the first large-scale renewable energy deal announced by Mississippi local governments, according to our Transaction Tracker. The solar energy was purchased through the Tennessee Valley Authority’s Green Invest program, which provides a special utility green tariff that local governments, as well as commercial and industrial customers, to buy renewable electricity at scale. Green tariffs can be particularly useful approaches in markets where customers are served by a monopoly utility, which can limit the availability of other types of transactions such as power purchase agreements (PPA).
Local governments are also leveraging corporate buying power to support clean energy deployment. For example, in Georgia, Municipal Authority of Electricity Georgia (MEAG Power) added 80 MW of solar to its portfolio for the first time on behalf of 49 local government members. A portion of the solar output, 26 MW, will be assigned to local Walmart stores across 14 Georgian cities.
These examples are models for how local governments can leverage the power of partnerships with utilities expertise and corporations to gain procurement and deploy more renewable energy resources.
3) Interest in brownfield solar is expanding.
While things like on-site solar and green tariff programs helped first-time buyers break into the market, more experienced buyers upped their game by developing solar energy projects on “brownfields,” which include contaminated land and closed landfills. In 2021, cities and counties in the United States had 21 of these projects, totaling 207 MW from converting brownfields to “brightfields.”
As outlined in RMI’s The Future of Landfills Is Bright, brownfield solar helps local governments achieve their climate goals more efficiencies while avoiding land-use conflicts. It also broadens sitting options, which is important for cities and counties with limited available space. Additionally, brownfields are often located in economically distressed communities. Transforming such lands into sources of clean power, jobs and economic opportunity can play a key role in revitalizing these neighborhoods.
As part of Houston’s Climate Action Plan, the city’s Sunnyside Solar Project is expected to become the largest brownfield solar project in the United States. This project’s 52 MW of solar panels will be able to power 5,000 homes and offset about 55,000 metric tons of CO2 each year. Similarly, Columbus, OH will transform a closed landfill into a nearly 50 MW solar park. These two projects are both expected to be completed and operational in 2022.
Brownfield solar can also be a good choice for aggregation deals between peer municipalities in the same area. Ann Arbor and Pittsfield Township in Michigan together planned a 24 MW landfill solar project that will offset over 80% of the current municipal electricity usage for Ann Arbor and 100% for Pittsfield Township.
What’s Next for Renewable Energy in US Cities?
US cities maintain strong momentum in renewable energy purchases in 2021, but the future holds both potential and challenges.
On-site projects with smart sitting are expected to gain more interest as cities prioritize local land and resources. Similar to brownfield solar, water-based “floating solar” has also attracted buyers’ attention recently. For instance, the Cohoes, NY recently received $3 million in federal funding to construct a floating solar demonstration project on a municipally owned water reservoir. This is a model that other low-income communities could follow.
Meanwhile, investment in other renewable energy sources will likely grow as well. For example, Skagit Public Utility District in Washington state installed a 21 kilowatt (kW) in-pipe hydropower system last year. This will help the community advance its net-zero goal while offsetting the use of grid power at the pump station in an amount equivalent to 3.5 million pounds of fossil-fuel-based carbon emissions annually.
The path forward with respect to large-scale solar procurement is more uncertain. Both global supply chain issues and the US Commerce Department’s solar tariff investigation on panels imported from Southeast Asia have increased solar PPA prices and created shortages, putting many planned projects at risk. This might slow down cities’ solar purchases in the short term, but they can regain the momentum in the long run by utilizing risk mitigation strategies during procurement, such as setting a minimum limit (or “price floor”) for the revenue a city can receive from the sales of solar output.
It’s more important than ever that cities band together to take urgent and ambitious actions to mitigate the climate crisis and meet their sustainability goals. To help navigate current market barriers and other challenges, experienced local governments should leverage their valuable expertise and proactively share lessons learned with their peers.
Momentum on renewables must continue to accelerate to address climate change. Cities are showing that they can lead the way.
Originally published on WRI’s Resource Institute. By Tatsatom Gonçalves, Yuning Liu, Jingyi Tang, and Joaquin Rosas
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