Conversation

Developing community solar cooperatively in Minnesota

Cooperative Energy Futures' inclusive approach to clean energy

The Cooperative Way

 

Timothy DenHerder-Thomas, general manager of Cooperative Energy Futures, sat down virtually for a conversation with Marie Donahue, Sustainability Storyteller with CERTs. Cooperative Energy Futures is a solar energy developer and cooperative based in Minneapolis that works across Minnesota.

During the interview, DenHerder-Thomas talks about his journey working on climate and clean energy issues, and Cooperative Energy Futures' vision and approach to community-scale solar energy. He gives an overview of Minnesota’s leading community solar garden program and how his organization is working with residents and communities to address energy burden and strengthen participation in the energy system.

 

Listen to the conversation or read it below.

Both the audio and write-up have been edited for length and clarity.

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We're using community solar as a pathway towards having an energy future where people are working together.

Timothy DenHerder-Thomas, General Manager at Cooperative Energy Futures

Marie Donahue: Welcome! Could you introduce yourself to our listeners and share a bit about how your path led you to working on clean energy and what you do in your role with Cooperative Energy Futures?

Timothy DenHerder-Thomas: I’m Timothy DenHerder-Thomas, the general manager of Cooperative Energy Futures, and we are a community-owned, clean energy cooperative providing access to clean energy for residents across Minnesota.

I got into this work from action even as a student around climate change and clean energy—seeing that we need to take action on climate change and the energy transition in a way that's going to help our communities. I think a lot of times people see a tension or that there's some kind of conflict between taking action on these really important environmental concerns and saving costs for households and creating stronger local economies. And that's really not the case.

From the beginning of my work in this space, [I’ve been] figuring out ways that we can use clean energy and other climate solutions as a way just to make people's lives better, to reduce the cost of living, especially for low income households, and to create local jobs and local economic development, in a way that's particularly benefiting low income communities and communities of color. That's really been why I got into it.

It's been very powerful to see how a cooperative model for community ownership has started to unlock those benefits and create real ways for people to participate in change.

 

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Timothy DenHerder-Thomas taking part in conversation at the Clean Energy Resource Teams conference in 2018.

 

Marie Donahue: Wonderful. So, I wanted to actually take a moment to share a related anecdote from my time as a student—when I saw you speak early in my own journey in this work too. It was an event in 2008, one that Will Steger of the Will Steger Foundation at the time, which is now Climate Generation, was headlining at my college campus in Chicago. You were a Macalester student who was featured on this panel about taking action on climate change. Maybe you remember the event but probably would not have known I was in the audience. So, I wanted to mention that interesting intersection. I since moved to Minnesota and have felt really inspired by your work here and that event and how our paths have crossed.  

Timothy DenHerder-Thomas: It’s really cool just to see how both people are on the journey and our growth journeys and developing our capacities to make change but also how the movement as a whole and the space of people working on climate change has developed over the past 10 or 12 years.

I got into this work from action even as a student… seeing that we need to take action on climate change and the energy transition in a way that's going to help our communities.

Timothy DenHerder-Thomas, General Manager at Cooperative Energy Futures

Marie Donahue: You spoke a bit to this in terms of both starting from a motivation from climate change, as well as that access component, but I’m curious to dig into those motivations a little more and have you talk about why those things matter to you in this work.

Timothy DenHerder-Thomas: A lot of people don't necessarily think about this, but energy is actually a huge cause or trigger factor in economic justice issues in our state. One of these is the energy burden issue. Low-income households pay so much more of their income to pay energy bills than middle- and upper-income households. If you're below 50% of the poverty level that number jumps all the way to 15% or 16% in Minnesota. That's a really heavy burden.

Another thing people don't really think about on the economic burden of energy is that keeping your lights on, keeping your power operating is absolutely essential. Falling behind in utility bills and having utility shut-offs is actually one of the [common] causes of eviction. It's also the leading cause of people taking out payday loans in Minnesota, to pay utility bills. That's highly uneven by race. People of color are far more likely to live in rental housing, in homes that have not been adequately invested in and maintained, which cost more to provide energy to. There are health and safety issues there. If your building is too hot or too cold and you can't maintain the temperature because that's operated by the landlord or the building is not well-maintained, that's a health and safety concern, as well as all the combustion and indoor air quality issues that come with that.

 

Photo: Crew from Impact Power Solutions (IPS) installs project on Shiloh Temple.

We also have this huge economic injustice, more at a macro-scale in terms of where our energy dollars are going. One of the facts that I've always found really powerful is here in Minneapolis alone, we—all of the energy users in Minneapolis—spend $540 million every year, paying for electricity and gas. That's half a billion dollars that's going to two large energy utilities. We don't really have a choice, right? If we want electricity, we have to pay Xcel. If we want natural gas, we have to pay for CenterPoint.

The clean energy future is really opening up the opportunity for us to move some of those dollars that we're already spending into local projects that are locally owned and also to create jobs in our community and reduce the cost of energy. That's just a no brainer and it's a really important part of how we bring economic power back to our communities and bring democracy and control back to our communities. And really ensure that we as people living in our neighborhoods have a real stake in deciding how things are going to work.

The clean energy future is really opening up the opportunity for us to move some of those dollars that we're already spending into local projects that are locally owned and also to create jobs in our community and reduce the cost of energy.

Timothy DenHerder-Thomas, General Manager at Cooperative Energy Futures

Marie Donahue: I'm curious to learn more about the history of Cooperative Energy Futures as an organization. If you could share with us how that evolved and formalized into its own entity and how you operate as a business today.

Timothy DenHerder-Thomas: I'm one of the co-founders. We started Cooperative Energy Futures towards the end of when I was in college. It was a partnership between young people working on climate change and community members who really wanted to see local energy solutions. It was built off of an insight from a project that I did when I was in college. We created this revolving fund where we invested money in energy efficiency or other resource efficiency things on the college campus. That saved money and then used that savings to rebuild the fund and, therefore, be able to invest in the next thing. That was a key insight for me—saying well actually we have this huge amount of energy waste and [a] missed opportunity to recycle dollars that we're currently spending paying for fossil fuels and dirty energy into the development of energy efficiency and local clean energy.

And the big question there was: If we can do this on the college campus, why can't we do this in all of our communities? What is blocking the opportunity for ordinary people to be a part of that cycle of wealth creation?

What we pretty quickly found is that there's actually a large and robust industry already out there that's harnessing that opportunity for large corporations, colleges, universities, cities and large institutions, but there really aren't organizations that are doing that for individual households and for communities as a whole. Because the individual opportunity for each household is pretty small. It's thousands or 10s of thousands of dollars, not hundreds of thousands of millions… So, really, the vision behind Cooperative Energy Futures was how can we bring people together to create that scale, not by just working with the big players, but by bringing lots of small players together to concentrate and share our demand for energy efficiency, clean energy and clean energy services. To use that as a way to build up shared ownership. And to build up a viable business that can work for all of us together. That's really the heart of the cooperative concept. That's what cooperatives are all about; it's achieving things together that we couldn't achieve alone.

Early on, you know we dealt with all of the existing barriers that happen in the energy sector—where we weren't allowed to build energy that we own together and share that energy. We could do bulk buying for energy efficiency or solar, but there are so many barriers that prevent people who don't have access to upfront money or who don't own their own buildings or whose building just has some problem. Whether the roof isn't a good fit for solar or there is knob and tube wiring in the walls that prevents you from insulating.

There are all of these very nitpicky barriers that make it hard to do things as a group, even when doing so is cheaper and saves money for everyone. So, we really struggled as a co-op for about the first five years, a largely volunteer organization trying to figure out well, how can we do something that actually works?

 

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Community solar garden developed by Cooperative Energy Futures on the roof of Shiloh Temple International Ministries in North Minneapolis.

 

The take-off point for us as an organization was after the launch of the Community Solar Garden program in 2013. Because community solar creates this opportunity where you know, basically, anyone can participate if you pay an electric bill. You can be a part of it. You don't have to invest anything, you don't have to own property. And so all of a sudden, instead of coming up with things that maybe work for five percent of our membership, we had a solution that we could really scale that works for 95% or maybe even more of our membership. And so we have focused over the past four or five years on scaling that up. Now we have eight cooperatively-owned community solar gardens serving around 700 members across the state that will offset basically their entire electric bill for the next 25 years. That's created growth and sustainability for our co-op. We're continuing to use that model and to scale that model up.

But we're really now in the beginning stages—now that we have a solid base of operations. How do we start coming back to other business models like making onsite solar accessible for individual low income households or getting back into energy efficiency? Or making weatherization and insulation broadly accessible all across our community?  We're still a pretty small organization. We have 900 members. We operate over $16 million worth of clean energy infrastructure, but that's a drop in the bucket at the same time. So, we really think most of the opportunity here is in our future and in the future of other communities that are coming together to build cooperatives that are doing basically the same thing.

 

Marie Donahue: For our listeners who don't know, Minnesota is a national leader in community solar deployment. So, I'm curious, since you mentioned this earlier and are so well-versed in how this policy was developed and how this model works in practice, could you give us an overview of this program? And share any barriers or ways you think it could be improved?

Timothy DenHerder-Thomas: Sure. So the community solar garden program in Minnesota really does two things. The first is that it requires the utility in Minnesota, currently that’s just Xcel Energy, to connect clean energy projects to the grid if they are community solar projects, and then it requires that the utility pay community members who subscribe a certain rate for the solar energy that's produced. We as Cooperative Energy Futures, we’re a developer. We're not getting paid by Xcel for the energy that our projects produce. Instead our community members, the subscribers, are getting paid by a credit on their utility bill.

 

Photo: Subscribers gather beneath the community solar canopy atop the Ramp A parking garage in downtown Minneapolis developed by Cooperative Energy Futures in partnership with both MnDOT and the City of Minneapolis.

This effectively means we can go out and promote community solar subscriptions to anyone who pays a utility bill to say, “Yeah, I want to be a part of this project.” We assign them a certain portion of a project, so let's say the project is 1000 kilowatts. Maybe one household is going to use 10 kilowatts. So, they have 1% of this overall project. Every month, the utility and we have data monitoring on our systems that says, “Hey here's how much energy the system has produced every month.” The utility reads that and assigns 1% of that energy to that subscriber who has 1% of the garden, and so on and so forth.

Each subscriber is getting a credit on their utility bill for the energy that their part of the project is producing. We have it set up so that most of our members are not paying anything upfront for their subscription. Instead they're just paying month-by-month for their subscription and the amount that they paid to the co-op is less than what they save on their utility bills. There's a net savings.

You mentioned barriers. We found this to be a really exciting program, but we are nevertheless concerned about how it has worked out statewide as a whole. One of the concerns that we've had is that less than 15% of the community solar in the Xcel Energy program here in Minnesota is actually going to directly benefit residents. Most of it is actually subscribers who are institutions or corporations, not individual households. So, there really hasn't been very much residential access. Because for a lot of the big developers, it's a lot easier for them to find [for example] five large entities and to finance that, than to go and work with 100 or 200 individual households in a community.

You know, even within those developers that are doing residential, most of them have credit score limits, because they finance it based on individual consumer credit, which is really exclusive because almost half of Minnesotans don't have credit scores that will match these thresholds that most of the developers are using. That again tends to skew towards renters, low-income households, people of color, who have had various historic barriers to building credit and building wealth. We see that practice, which is pretty common in the industry, as just reinforcing the injustices that have been happening in the energy system all along.

And so we really focused on building a model that doesn't have credit or income requirements and directly partners with community-based organizations that work with renters, that work with low-income residents, that work with communities of color, to ensure that our membership is broad and diverse and really represents the full scope of who lives here in Minnesota and to make sure that the people who need this most really have first priority access.

But again, what we do—I'd say we have a very large portion of the low-income residential community solar in the state. We have a decently sized portion of the residential community solar in the state, but if you look at all the community solar in the state, we're still a very small piece of the pie.

The place where people really connect and say, ‘I want to be a part of clean energy in my community,’ is through connections with other people in their community, who have either already done it or who are really excited about the idea.

Timothy DenHerder-Thomas, General Manager at Cooperative Energy Futures

Marie Donahue: You just spoke a bit about the partnerships and work you’ve done that help reach residential customers and folks that have traditionally been left out of those larger scale community solar developments. Could you elaborate on those—who you have worked with and what you’ve found to be successful?

Timothy DenHerder-Thomas:  It really varies based on our project. Some of our projects really originated in a specific community. For example, our Shiloh Temple community solar garden in North Minneapolis was a direct partnership with a couple of North Minneapolis organizations. That was directly recruiting certain neighbors immediately around the project.

Some of our other projects in Greater Minnesota are much larger, for example, our project right outside of Faribault brings together many different communities, and it was just sort of based on general interest in the area. We have signed up and worked with organizations connected to a manufactured housing park in Cannon Falls, another manufactured housing park in Northfield, a couple of Somali community organizations in Faribault to engage subscribers.

It's a really broad range, we have community organizations, neighborhood organizations, local governments, and just interested individuals who are sharing this with their places of worship, with their circles of friends. All across the general region, we really believe in an outreach model that is community based and person-to-person. We do all sorts of general stuff like Facebook ads and FYIs in local news outlets and community events and stuff like that, but what we've really found changes the quality of that relationship is when it's not just sort of a mass marketing campaign. Maybe that's how people originally hear about it, but the place where people really connect and say, “I want to be a part of clean energy in my community,” is through connections with other people in their community, who have either already done it or who are really excited about the idea.

 

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Bishop Richard Howell of Shiloh Temple in Minneapolis and mayor Jacob Frey led north-side faith and civic leaders in a song of blessing at the launch of Cooperative Energy Futures' community solar garden. Photo by Jayne Solinger for MPR News.

Marie Donahue: Yeah that's great, and I think that speaks to the ways you are doing things differently and reaching folks that wouldn't have been engaged in this work otherwise. CERTs has been doing work in the manufactured homes space too, and you mentioned renters as well. You'd mentioned that community solar gardens are really helpful for homes that don't have that ability to have solar on their rooftops. Was that some of the motivation? How did some of these unique projects and work with certain groups evolve?

Timothy DenHerder-Thomas: We look at community solar as [something that] can work for anyone, but it is absolutely essential for people, who can't do solar themselves. There's a wide range of reasons why people can't do solar themselves. Probably, first and foremost, is if you don't own property. That's the whole renter category. Second is maybe you do own property but your building isn't a good fit for solar. This is often the case in manufactured housing or just other building formats that aren't very amenable to accommodate solar, if you have you know shade or being trees or other buildings or things like that.

And then, third, and just as importantly, is the upfront cost issue. Most people, especially low income folks are renters, manufactured housing residents and many people in communities of color. You can save money over 25 years, if you put $10,000 up front. It's just like, “Well, that would be nice.” We see this as a solution that can work for everyone, but it is right now, the solution that works for the people who have the least access to property and credit and capital in our society. So, we've tried to focus our projects as much as possible to be actually located in and be initiated by low-income communities and communities of color. We have a number of projects like that.

Where we haven't really been able to site projects specifically in and lead by those communities, we've identified a good place for solar and then we have identified community organizations that represent and engage and support low-income communities and communities of color to identify, “Hey, do we want to be a part of this?” Because we see that as it's essential. If we're not doing that we're not doing our job.

From our perspective, a successful project is one where subscribers… are really excited about it. That they really see this as one step in their journey towards becoming better energy citizens, or leading the way towards a better energy future.

Timothy DenHerder-Thomas, General Manager at Cooperative Energy Futures

Marie Donahue: You’ve spoken to some of these, but what, in your opinion and experience, makes a community solar project, or really any clean energy project, a success?

Timothy DenHerder-Thomas: [laughing] There are a whole bunch of very nitty-gritty things on that list, and then there's probably some more values based things.

 

Photo: Community solar garden developed by Cooperative Energy Futures near Faribault, MN.

On the nitty-gritty side, it has to be large enough. There is an economy of scale, and I think people sometimes overestimate that. They think, “Okay, you have to have hundreds of acres of solar for it to be super cheap.” And actually if you have five acres of solar, it's really quite cheap. I think there's a bit of extra savings you can get by going bigger, but it's way cheaper to do it at that scale then to do five kilowatts on a roof. That's one of the opportunities here—by developing clean energy at a community scale, we can make it a lot more cost effective.

Second is siting. There has to be the capacity on the local electric grid, and we spend a lot of time and money figuring out how we can connect to the utility’s grid and make sure that there's enough capacity on the lines. Then, that there are enough people in the community that actually want it. That generally hasn't been the hard part here, but it's a key factor.

Finally is structuring it financially. It's very complicated to finance and structure these sorts of systems because of how the federal tax code both incentivizes but also makes it hard to use those incentives for renewable energy. That's probably one of the key factors in a successful project.

Then there's more of the values things, I think. From our perspective, a successful project is one where subscribers—meaning our members who are part of it—are really excited about it. That they really see this as one step in their journey towards becoming better energy citizens, or leading the way towards a better energy future; who also see themselves as working alongside the other members, often with very different life experiences.

We see these projects bringing together people who don't necessarily see themselves as the same as other people in the same solar garden, but we can be part of this thing together. That's making an improvement in our communities. I think we're really just at the beginning of creating that sort of deep and visionary engagement in our membership. For a lot of people when you first sign up it’s like, “Oh, I'm going to save 100 bucks a year on my utility bill and it's clean energy. That's great!” But as people start to experience: “Oh, and actually now I’m getting profit distributions by being part of a co-op. Oh, I get to vote in elections for our cooperative board,”—and we're just starting this out now, but—“Oh, there's actually groups of members meeting in my community to talk about what we do next.”

That's how [our energy system] transitions from a very retail transaction into relationships and shared accountability and shared decision-making, which is, I think, really the purpose here. We're using community solar as a pathway towards having an energy future where people are working together.

 

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Cooperative Energy Futures partnered with the City of Edina on this community solar array located on the roof of their Public Works building.

We're using community solar as a pathway towards having an energy future where people are working together.

Timothy DenHerder-Thomas, General Manager at Cooperative Energy Futures

Marie Donahue: What other specific projects are you focusing on now or what are you hoping to work on in the future?

Timothy DenHerder-Thomas: We're really excited about scaling up community solar and doing it in a way that is led by local communities. Now that we have eight projects and 700 members that have been participating and receiving the benefits for a year or more, it's a lot easier for us to go to other communities and say, “Hey, this is what we've been able to achieve. Do you want to do this?” And same thing with individual subscribers. We're really excited about partnering with local governments to offer community solar that is community owned and low income accessible to their residents and for their communities. We're really excited about partnering with corporate or commercial entities that have big rooftops where they may not want to invest in solar themselves, or they may not have the energy demand on site, but they are really interested in participating in those benefits or getting some of the benefits but also have a really positive community impact by opening that opportunity up for others in the community. So there's a whole bunch of strategies for how we scale up community solar and [get] more member communities across the state. That's a really key piece of our vision.

We're also really excited about starting to do more on-site solar. We're working on a project right now focused in Minneapolis that is installing on-site solar on affordable housing—multifamily affordable housing—that is directly reducing the tenants' utility bills with no up-front cost to the tenant or landlord. And that's an exciting model that's possible because Minnesota has some incentives for low-income solar, but we see that as an entry point into a model that can expand for individual solar and in communities across the state.

We're very excited about some of the work that's happening in Minneapolis and at the state level around inclusive financing. We haven't exactly figured out what our role is, but we really want to help scale up energy efficiency with our member communities.

And then, finally, one of the things that's on our horizon and on our radar that we haven't really started on yet and that the rules aren't really in place for yet, but we're very aware that when utilities are managing the grid, they are buying and selling grid services on these regional markets like the MISO market and things like distributed solar or things like batteries for electric vehicles or hot water heaters. Any of these kinds of devices, where you can vary when they use energy—these are producing very valuable grid services that our local utility or other utilities in the region really need in order to balance the electric grid. And right now, again, large commercial, industrial users can participate in those markets and utilities can participate in those markets. But very small energy users like residents can't. But there's recently a federal order that essentially says that in the next two years, all states in the country will have to allow aggregations of community-based groups to participate in the grid market with these sorts of services, which creates an opportunity for our members to bulk buy those sorts of things together. Whether it’s distributed solar, battery storage, electric vehicles, hot water heaters—I don't know—but then aggregate that as a co-op and offer those services to the larger grid, whereas each of us individually couldn't do that, but we can do it by working together. It’s really just in the idea stage at this point, but it's a huge opportunity that we need to make sure communities aren't left out of.

I would just encourage people to be open to lots of opportunities to try things out and gain experience and go from there because it really is an emerging industry and things are changing all the time.

Timothy DenHerder-Thomas, General Manager at Cooperative Energy Futures

Marie Donahue: What advice would you give to our listeners about engaging and clean energy projects in their communities or pursuing a job or career, like you have, working in clean energy?

Timothy DenHerder-Thomas: In terms of engaging in clean energy projects, I would first really encourage asking the detailed questions about who's deciding and who's controlling this project and who's getting the benefits. I think there's a very robust industry out there where the dominant pattern is a private developer, is making the decisions and figuring out—and this is sort of a crass way of putting it—but how many crumbs to throw to local communities. I think we're really asking those hard questions to figure out who's deciding where the benefits going are really important.

And, second of all, I think we need a lot more communities and a lot more areas where there is capacity for communities to play more of the decision-making and development role. You can still hire private installers to actually build things and bring in financing, but it's really important for listeners to be looking for groups that are building that capacity at the community level, so that decision-making and control can really be accountable to community needs. That's something that we're trying to build that capacity for and more groups around the country are doing as well.

 

Photo: Putting the finishing touches on the City of Edina community solar garden.

In terms of the career space, there are just so many different roles. I think a lot of people when you hear solar think about boots on a roof. That's a very important piece of it, but it's by no means the only piece. There are people assessing sites and designing solar. There are the people in a community solar model going out there in the community and inviting other people to be a part of it, which is much more of a people-to-people, sales or organizing-type work. There’s the finance side of it, and pulling all that together.

So, I think I would just encourage people who are looking at this from a career path to ask the question: “Is there a specific piece of this that feels like a really good fit for me? How can I use that to create a job description that's in demand, first of all, but also create a role in the community that's going to create positive impact?”

Be open to lots of opportunities to try things out and gain experience and go from there because it really is an emerging industry and things are changing all the time.

Marie Donahue: You've set an excellent example of someone dabbling in lots of different areas and creating something really powerful through this model while bringing others along with you. I think that’s really inspiring. I've loved watching your work with communities, and I hope our listeners dig into Cooperative Energy Futures more. To end, I wanted to give you a chance to share any other thoughts or things that we didn't touch on that you want to sneak in here before the end.

Timothy DenHerder-Thomas: I will just briefly say that this question of community ownership, it's obviously really important to us, and I think if you look at different conversations going on around the country, it's often treated like it can't happen.

But I think it's really important for communities not to just accept that answer because there's really clear counter examples. We're doing it. There are co-ops in the Northeast, in Massachusetts and in New York, that are doing it. There are dozens of other groups around the country who are working towards doing this right now. It requires imagination, and it requires consistent pressure and demands that this is how it has to work. But it can be done, and I think that conversation has been not missing but on the sidelines in the U.S. for a while. It's starting to merge, and I think it's important that communities see themselves as being in the driver's seat, and to be able to say, “This is how we need to do work in our community.”

And be willing to learn and understand the details of the industry, so that what you're asking for is actually feasible and reasonable, but don't take “No” for an answer.

 

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Cooperative Energy Futures community solar gardens in Greater Minnesota, clockwise from top left: Haven Township near St. Cloud, Clarks Grove in Freeborn County, Janesville near Waseca.

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