Clean and Local With an 8% Return on Investment

In a report issued earlier this year, the Edison Electric Institute said, “As a result of a confluence of factors (i.e., technological innovation, public policy support for sustainability and efficiency, ….) … the threat of disruptive forces (i.e., new products/markets [such as solar power] that replace existing products/markets [such as coal fired power plants]) impacting the utility industry is increasing ….  the utility industry and its stakeholders must be prepared to address these challenges in a way that will benefit customers, long-term economic growth, and investors. Recent business history has provided many examples of companies and whole industries that either failed or were slow to respond to disruptive forces and suffered as a result.”

Translation: The traditional providers of electricity are afraid of trends that give even the tiniest sliver of the pie to others, such as renewable energy providers; and they are trying to make the people around them afraid as well.

The huge, well-financed electric utilities are going on the offensive to preserve their way of life and that of their investors. What is their concern? Among other things, irrefutable good sense that distributed energy resources (DER) makes when looking to how we will get electric power in the future. Always small, and much too rare, examples of DER are turning up across the country. Here is one:

North of Delavan, Wisconsin on Dan Osborne’s farm where there used to be a bean field there are now 80 solar panels generating renewable power for over 125 homes. This is a small, but successful,community-owned example of an energy shift.  The solar farm was developed by Convergence Energy of Lake Geneva, WI and has owners from all around the region.

Osborne offered 14 acres of his farm for the 660-kilowatt (kW) facility outside of Delavan. Then, Convergence arranged for 33 individual Limited Liability Companies to invest in 20 kW increments, which are sold back to the utility at retail price as a part of the state’s net-metering policy (note: the state’s net metering policy caps projects at 20 kW, thus the 33 separate companies). Project investors signed up for either an 11-year or 20-year investment term (with an expected 8% return on investment) after which the project ownership reverts to Convergence Energy.  

Federal and State incentives are fading for now, and the 8% return is not guaranteed, but is likely for the scenario at the Osborne farm. For details go to: