Unusual Suspect: Solar Development in Indiana

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Indiana’s multifaceted approach to solarization has placed it among the fastest-growing solar states in the U.S. In 2013 it ranked 11th in the nation for newly installed solar capacity (54 MW), and it shows little sign of slowing down this year.

It has typically been the case that places with above-average sunshine, generous government incentive programs, and ambitious quotas on renewable energy production tend to see the healthiest responses in solar production both in the residential and the utility-scale sectors. Strangely, compared to perennial solar standouts like California, Arizona, and Hawaii, Indiana has none of these predisposing factors. Instead, Indiana’s solar growth has been driven largely by local and state policymakers, entrepreneurism in the utility sector, and small- to medium-scale project developments.

Solar projects in the capital city of Indianapolis recieved a significant boost from a liberal feed-in tariff that was voluntarily implemented by Indianapolis Power & Light. Last year was the culmination of a three-year pilot program that IPL began in 2010, offering $0.24 per kilowatt-hour for facilities in the 20 to 100 kW range and $0.20 to those above 100 kW. The program spurred a rush of development, but also sparked concerns this year that without continued funding, unfinished solar projects would languish.

Despite the uncertain future of IPL’s incentive programs, many developers are encouraged by the falling costs of materials and improved site construction techniques. These factors could allow solar installations to become a commercially competitive slice of the utility’s power generation pie with or without assistance from state and federal programs.

In the event that IPL elects not to continue with its incentive program in the coming years, other organizations are offering funding to the Indiana solar industry to help bridge the gap. The Indiana Association for Community Economic Development (IACED) is one of 13 citizen groups across eight states that were awarded a total of $2.5 million in an air-quality settlement between American Electric Power and the Environmental Protection Agency. IACED has earmarked its $400,000 share of the settlement to fund localized, small-scale community projects of less than half a megawatt. The organization plans to provide technical assistance and grants of up to $30,000 per project for a handful of community-based solar developments.

In an effort to rehabilitate contaminated or unusable land, the EPA has designated specific parcels as Superfund sites. Developers are encouraged to find innovative ways to use these sites for beneficial purposes, and utility providers have discovered that these plots can be uniquely suited to become commercial solar farms.

The Maywood Solar Farm in South Bend is built on one such site. The project represents a cooperation between Indianapolis Power & Light and a number of private-sector solar companies. Improved building techniques allow the construction phase to take place with minimal displacement of potentially contaminated earth, and when completed the project will turn previously worthless land into a lucrative energy plant.

Furthermore, the Indiana Municipal Power Agency has pledged a $2 million investment toward the construction of a ground-mount solar farm in Crawfordsville. The membership of the IMPA consists of around 60 Indiana cities, and the organization is actively investing in the development of solar and other renewables in the state.

Remarkably, this development is being driven more by a corporate culture that seeks to lessen carbon emissions and reduce dependency on imported energy rather than on specifically imposed state or federal policy. Phil Goode, manager of Crawfordsville Light & Power, said that a reduction of the town’s carbon footprint and increased reliance on cheap, locally produced energy has been a priority over the past several years, and that if the construction of the solar farm is successful, the door is open for the IMPA to expand Crawfordsville’s solar capacity further.

Solar leases have also seen an increase in popularity among those that would like to invest in solar but cannot commit to a residential setup. Berea Municipal Utilities has increased the size of its solar operation from 60 panels in 2011 to over 240 today. Investors can lease individual panels and receive energy credits on their monthly bill, regardless of where they live within the district. The power generated from these panels can power roughly 12 households per year, but both the capital costs and the benefits are spread throughout a community of “solar shareholders” who have invested in the project.

Perhaps the central explanation for Indiana’s solar growth comes from a large-scale shift in attitudes toward locally produced renewable energy. As solar panels get better and installations costs drop, Indiana utility companies have unprecedented opportunities to access the potential of solar power.

Furthermore, renewable energy is a popular concept among the ratepaying population (as is evidenced by the number of community organizations and local-scale projects throughout the state). Policymakers appear to recognize this; there is little resistance on their part to the continued expansion of solar throughout the state. Even if the incentivized jump-start programs of the past several years are discontinued, solar developers have a solid foothold in Indiana with an optimistic eye to the future.