The following is a guest blog from Warren McKenna, manager of Farmers Electric Cooperative (FEC) in Kalona, IA, where he has established a goal of generating 20 percent of the co-op’s power from renewable sources by 2020. To achieve the goal, FEC-Kalona offers a number of unique programs, including a premium rate for members producing energy from solar and small wind systems. The McKenna home has energy monitors, is mostly solar powered using two arrays and is heated with wood pellets.
As rural electric cooperatives (RECs), we strive to live by the Seven Cooperative Principles. The most important at our cooperative is the last, which reads: “Concern for Community – While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.” This principle defines why we are shifting a part of our cooperative’s focus toward site-based renewable energy.
A major factor shaping our efforts in Iowa is, like many places across this nation, the difficulty of getting new coal or new nuclear plants permitted, much less built. Energy generation capacity needs are projected to increase 30 percent over the next 20 years. The options for holding member kilowatt-per-hour (kWhr) costs down favors more locally generated renewable energy.
A major reason our cooperative decided to promote renewable energy through incentive rate structures was to allow our membership to take advantage of federal and state tax credits. We also decided to meter each installation separately, a move that will enable us to set the rate we pay these renewable energy generators now and into the future.
The results from membership participation and feedback have been astounding. We now have 90-plus separate customer-members receiving an incentive-based rate for renewable energy produced on systems that they own.
These efforts were further solidified through our participation last September in a week-long tour of Germany for energy representatives from throughout the United States sponsored by the 25x’25 Alliance as part of its Energy For Economic Growth Initiative. There, we visited renewable energy sites and met with politicians, trade unions and utility representatives.
Most surprising was the German mindset toward energy efficiency, conservation and renewable energy, which is the complete opposite of our own. Something like 80 percent of Germans favors renewable energy. How can they be so right? Maybe they used less power because their kWhr price was twice our average. However, I’m told that, on average, they use half as much energy as we do in the United States, so it equals out.
I noticed things like dual flush toilets and heavy clad windows that tilted for ventilation as a standard across the country. These were only the blatantly obvious observations I could make, but I’m sure there were many other measures that they have done to save energy and save money.
Understanding how Germany has successfully become a leader in the renewable sector has been an eye opener. Much of their model actually encourages community participation by its design, such as a community-owned biodigester facility we went to in Jundë. These types of projects surprisingly include the same underlying themes as our seven cooperative principles. In fact, renewable energy under the cooperative model is experiencing tremendous growth in Germany.
Generating a substantial amount of renewable energy inside our cooperative systems may seem like a fairy tale, but in Germany it is reality. If we were to take the German feed-in-tariffs and couple them with our existing tax credits, we could actually shorten the renewable energy system payback time to half of that established in their model. Site-based renewable energy creates local jobs, enlarges the tax base, and increases the economic multiplier, which is the number of times each dollar is re-spent within our local community.
Where do we go from here? I have learned over these past few years that our consumer-members are very receptive to both funding and installing site-based renewable energy. We will refine our rates and continue down our renewable growth path. We plan on adding a cooperative-owned solar farm to help distribute and lower our total cost of renewable energy ownership. We look to organizations like the 25x’25 Alliance to further partner with rural electric cooperatives so others can see and share these tools.