Opportunity and Challenges for Renewable Energy and Communities

The energy sector is transforming from a “big” business structure driven by non-renewable environmental extraction to a sector built on accessible abundant and renewable energy to households and business of all sizes, according to a series of briefing papers by the Center for Social Inclusion. This change will bring exciting new entrepreneurship opportunities and the potential to transform socially and economically isolated communities into meaningful partners in their local and regional economies.

“Distributed generation provides new roles for communities to preserve and increase social equity, environmental quality, energy independence and wealth.”
—Center for Social Inclusion

According to the briefing paper Wind and Energy Generation at the Community Level, “Distributed generation provides new roles for communities to preserve and increase social equity, environmental quality, energy independence and wealth.” Distributed generation is cited as an emerging model that allows consumers, businesses, and landowners to become producers for the electric power grid. We hear a lot about a smart grid, but distributed generation would bring an array of benefits including both transmission efficiency and energy independence.

The briefing paper suggests that wind commercialization at the community scale has a moderate suitability rating for communities of color and a moderate level of entry risk to businesses interested in entering the segment. Communities need supportive public policy and technological assistance to get a toehold in the market for wind energy.

The paper points out that Windustry and other groups advocate using property tax financing programs to cover costs of installing and upgrading energy generation systems as a policy improvement that would gain major benefits:

  • First, access to credit can help cover much of the upfront costs, and during tough economic times this program offers an alternative to people who cannot tap into home equity lines or gain low-interest personal loans.
  • Second, the obligation to repay the loan stays with the property. Therefore, payments become the responsibility of whoever owns that property and is benefiting from the onsite electricity generation.

Windustry, in partnership with the Database of State Incentives for Renewables and Efficiency (DSIRE), has released a study of "Property Tax Financing Authorization" policies in 11 states that encourage development of renewable energy and energy efficiency projects. Property Tax Financing programs provide a direct way for individuals to cover some, if not all, of the costs of energy efficiency upgrades and distributed generation systems.

The Minnesota Flip is one of the useful models in the paper for structuring equity partnerships between community-held assets or individual landowners and investors, as it supports economically successful, community-driven partnerships that benefit individuals and corporate interests. Minnesota is used as a model policy state with the following policy structures enabling renewable asset development:

  • Renewable Energy Production Incentive
  • Agricultural Improvement Loan Program
  • Value-Added Stock Loan Participation Program
  • Interconnection Standards Law
  • Standard Power Purchase

Overall, the paper concludes that “it will be important for communities to advocate for rules and policies that allow community based wind power producers to get equitable access to the grid.”

Black, Brown and Green, a program of the Center for Social Inclusion, explores the economic opportunities and hurdles for green business models in communities of color. Black Brown and Green offers resources to communities and companies to help them identify their needs and develop a strategy for entering the Green Energy Sector.