Conservative Iowa farmers find a new cash crop — renewable energy

Source: Daniel Cusick, E&E reporter • Posted: Monday, December 1, 2014

FRYTOWN, Iowa — Warren McKenna’s Jeep SUV glides past stubbled farm fields, kicking up dust and fresh snow where only weeks ago a bumper crop of corn and soybeans filled the horizon.

Among the Amish and Mennonite families who have farmed this part of southeast Iowa for generations, McKenna is an outsider, or an “English,” as the German-speaking Amish call non-natives. Yet he is well-known in both town and country as manager of the 650-member Farmers Electric Cooperative of Kalona, a job he has held since 1992.

One day earlier this month, McKenna was making rounds with a visitor when he pulled the SUV into a farm where Leighton Yoder and his family raise Jersey cows and operate a small dairy. McKenna wasn’t there to talk about milk, but another farm product Yoder has been nurturing.

“How’s the power?” asks McKenna from inside the Jeep.

“It’s real good,” answers Yoder. “We’ve got strong sun and wind today. I figure I’m making more than 20,000 watts out there.”

The 20 kilowatts, which help form the backbone of the electric cooperative’s 216-square-mile distribution grid, are coming from Yoder’s farm-based energy systems. They include two 7.2 kW solar arrays mounted on the south-facing slope of a nearby field and a 10 kW wind turbine set atop a steel tower that may be the tallest structure around outside the Frytown grain elevator.

Yoder, whose Mennonite traditions generally eschew many energy-consuming home comforts, takes pride in his farm’s energy self-sufficiency and clean energy credentials. But the economics of renewable energy, and particularly solar power, bring the most satisfaction to the tall, 50-year-old farmer.

“I do like renewable energy,” he says. “And if I can make it pay, I’ll do it.”

Yoder makes it pay to the tune of $500 to $700 each month in avoided energy costs, or roughly half what his electricity bill totaled before he installed the turbine and solar panels and began selling power to the Kalona co-op under a unique feed-in tariff program that is tailored to the locals’ strong sense of self-reliance and energy independence.

Arrays spread over cornfields

In fact, the tariff program has become so popular that roughly two dozen other families in unincorporated Johnson, Washington and Iowa counties have allocated sections of their farms or home lots for small, distributed power plants, mostly using ground-mounted photovoltaic technology, in the past several years.

Together, they form the most successful community-based solar energy programs in the United States, according to the Solar Electric Power Association, which recently highlighted the Kalona cooperative for its pioneering solar work and named McKenna “utility CEO of the year.” The co-op also boasts the nation’s No. 1 ranking in installed solar watts per customer, with a cumulative capacity of more than 1,800 watts per member.

According to SEPA, McKenna and a small cadre of colleagues have made the Kalona farmers’ co-op “a national model for a hands-on, keep-it-simple approach to financing and building solar energy projects.” More significantly, they have done it in a deeply conservative corner of a Midwestern state with average solar insolation and where renewable energy is usually equated with big wind farms.

Iowa ranks third among the states for installed wind power capacity, with roughly 5,200 megawatts. That compares to 4.6 MW of grid-connected solar capacity, or less than one-third of the solar capacity installed in neighboring Minnesota and one-tenth of Illinois’ solar output, according to data from the Interstate Renewable Energy Council.

Yet Kalona is bucking the trend. The co-op today manages 1.2 MW of solar generation, or 30 percent of its members’ peak demand, using a variety of solar applications, including farm-based PV arrays like Yoder’s. There is also a 40 kW community solar garden in Frytown and an 800 kW solar farm completed last year by Eagle Point Solar of Dubuque, whose output is purchased by the co-op under a power purchase agreement.

The utility also has reached out to the area’s ultra-traditional Amish, many of whom are fully off-grid, by installing PV arrays atop roadside telephone stations that serve as the community’s primary telecommunications link to the outside world.

“The old lines won’t work when the new phones have fiber optics,” explained McKenna.

Leaving a fossil-fueled tradition

More than bringing solar power to a traditional farming area, the Kalona co-op’s initiatives have helped spur Iowa’s nascent solar industry, which between 2012 and 2014 added more than 600 projects with a value of nearly $25 million, according to state tax credit data reported by the Iowa Department of Revenue.

Indeed, the Kalona co-op’s full embrace of distributed energy, and especially solar, stands in contrast to the more guarded view of solar taken by Iowa’s large investor-owned utilities and even other rural co-ops that deliver power to roughly 650,000 Iowans through a network of distributors.

“Warren is kind of a lone voice out there among the utilities,” said Barry Shear, president and chief executive of Eagle Point Solar, which recently won an Iowa Supreme Court case upholding the legality of third-party solar agreements in the state (EnergyWire, July 14). “When you’re an investor-owned utility looking at distributed solar power, chances are you’re thinking about lost generation revenue. What Warren is doing is building a generation base for his customers.”

Regi Goodale, director of regulatory affairs for the Iowa Association of Electric Cooperatives, said in an interview that his organization remains largely neutral about what types of generation are used by its member utilities. Instead, it encourages individual co-ops to tailor their generation portfolios according to their members’ needs and preferences.

“To the extent the co-ops are able to implement a local solution that’s successful in the communities where they’re operating, good for them. That’s what we’re all about,” he said.

But going long on solar in rural Iowa is not an easy sell.

Traditionally, co-ops with limited or no generation assets of their own have joined power purchasing pools where they secure inexpensive kilowatts under long-term contracts from big generators. Such is the case in Kalona, where 50 percent of the utility’s power still comes from the burning of fossil fuels. In other cases, rural co-ops claim minority ownership in an existing baseload power plant, which in the Midwest is often a coal-burning plant.

A yen for homegrown energy

McKenna, who began his utility career as a lineman and who admits he used to disparage renewables — “that shit won’t work,” he once said — talks of a personal transformation that began in the late 2000s, when curiosity drove him to look at a handful of pilot solar projects being undertaken at other cooperatives around the state.

“The more I learned, the more I turned,” he said, ultimately leading to the installation of a 1.8 kW demonstration array outside his co-op’s Frytown operations center.

McKenna also set about turning others who could help community-based solar energy from concept to reality in his rural district. Among the early targets was Dale Yoder-Short, whose day job was, and still is, teaching high school science at the nearby Iowa Mennonite School.

Yoder-Short, who earned a Ph.D. in physics from Purdue University, also ran a part-time business as an electrician, and as McKenna recalls, he collared the teacher for a weekend course in solar energy systems offered by the Midwest Renewable Energy Association. The two men trained in Duluth, Minn., and came back with the gumption and know-how to build farm-based solar PV systems.

What began as a smattering of interest, including among Yoder-Short’s students and parents at the Mennonite school, which now supports its own 50 kW solar array, has mushroomed into an understated but unmistakable solar energy boom, the likes of which McKenna had hoped for but never expected.

“Our goal was to shift more of our energy resource local,” said McKenna. “And if we could get our members to bear some of the cost of that generation, so much the better.”

As often happens in agricultural communities, the early solar adopters set a template for neighbors to study and replicate. And, McKenna added, the utility was deliberate about not pushing the technology too hard, but rather allowed customers to make up their own minds about the costs and benefits of participating in the solar program.

Feed for the local grid

Terry Erb is among those who studied hard before biting on what is now one of the area’s largest private solar systems — a 36 kW rooftop array mounted on the office rooftop of his family’s farm and agricultural inputs business near Wellman.

The array, installed in November 2013, has reduced Erb’s power bills by an average 40 percent, or $700 per month, thanks to the feed-in tariff along with federal and state tax incentives that came with the project’s construction.

Like Yoder, Erb stressed the project’s bottom-line benefits, not its environmental ones. “I would say I did it for the sole purpose of generating energy,” he said.

Even so, he now routinely gets drive-by visitors wanting to know how the solar panels fit into his farm’s daily operations and management. “The main question I get is how the electricity is getting used on the farm. People like the idea of pulling power directly off the roof and using it to feed hogs or run equipment. It doesn’t work that way.”

Indeed, it’s the rural co-op’s 110-mile distribution grid that is being “fed” the electricity.

The feed-in tariff program adheres to a “buy all, sell all” model whereby participants purchase all their electricity from the co-op but also sell all of their distributed generation to the utility at fixed rates.

Currently, the co-op pays 20 cents per kilowatt-hour for the first 25 percent of a distributed solar system’s monthly generation. The rate steps down to 12.5 cents per kWh for additional generation that does not exceed that participant’s monthly consumption. If a distributed generator produces more than he or she consumes, the rate for the excess power drops to 6 cents per kWh.

For owners of renewable energy systems who do not want to participate in the feed-in tariff program, the co-op offers direct cash incentives amounting to 50 cents per watt for solar and wind power, with a cap of $2,500.

It also allows customers to invest in a community solar garden that has nearly tripled in size since the first panels were constructed. The entry cost is $375 to $475 per panel, with a payback rate of 12.5 cents per kWh.

“It has been successful,” McKenna said of the half-acre solar garden. “There’s currently only 40 kW installed in there, but it has more than 100 owners, and I’ve got a waiting list. We can’t add new panels fast enough.”