Tipmont Solar Cells Illustrate Renewable Energy Divide In Political And Power Circles

Nov 12, 2014

Tipmont REMC has installed 240 solar cells and is selling 25-year leases on each one for $1,250 apiece.
Credit Stan Jastrzebski / WBAA News

Alongside U.S. 231 in the small Montgomery County town of Linden, just south of the railroad museum, there’s a colorful new installation.

Row upon row of panels sits on the site of the Tipmont REMC headquarters. The ones that face north are bright orange – designed to reflect sunlight onto the ones that face south. Those are photovoltaic cells, navy blue with a crosshatching of wires running through them.

There are 240 of them in total and Tipmont spokeswoman Sasha Clements took a second at their unveiling to explain to the crowd how they’d be allocated.

“Tipmont members have the option of purchasing power from one or more of the panels that you see and receiving credit for the power that’s generated on their electric bill,” she says.

And that’s the key, says Tipmont Energy Management Supervisor Jason Monroe – members have to buy in. If they don’t agree with renewable energy or don’t want to pay $1,250 to lease the panel for 25 years, they don’t have to.

“We didn’t want to force anything on people," Monroe says. "So we wanted to give people the option to participate in Community Solar. And that’s why we went on a per-panel basis. Hey, it’s a low entrance cost, see how it does for you. Like I mentioned, we would never discourage anybody from installing solar on their own home, but what this does is it gave us an opportunity to impact those members who can’t do that.”

That’s in contrast to what larger companies like Duke Energy do, says Doug Gotham, the director or Purdue’s State Utility Forecasting Group.

“Duke Energy offers a green power pricing option," Gotham says. "So I as a Duke Energy customer have the ability to sign a contract with Duke Energy saying I’m willing to pay a little bit more for my electricity as long as it comes from a renewable source.”

As in many other states, Indiana generates the vast majority of its power by burning coal – renewable energy is a small percentage. So small, in fact, Gotham says it’s unlikely renewables could ever take over. But they could change the game, he says, especially if the Obama Administration keeps pushing for cleaner sources of energy.

“The utilities will be more innovative in terms of where are they getting their electricity sources from. I think you’ll see more diversity in Indiana. So coal’s not going away, but coal’s not going to be as big a chunk of the overall pie,” he says.

Now think about the current state of play:  Duke asks customers to pay more for renewable energy. Tipmont, on the other hand, asks customers for a lease fee up front, but then credits them back a little each month. If the panel generates even $5 worth of power per month on average – which Jason Monroe thinks is possible -- it makes the lessee a profit over the course of a 25-year lease.

Tipmont CEO Ron Holcomb says it’s an example of how big power companies differ from small ones.

“The benefit, I think, that Tipmont has – that we can leverage – is the fact that we’re rather small and nimble. And most importantly, we are non-profit and we work for our membership. That allows us to have a little more flexibility, I think, in our decision-making,” Holcomb says.

Duke Energy spokesman Lew Middleton says his company has no plans to integrate solar into the Indiana grid any time soon. And he bristles at accusations from consumer advocacy groups such as the Citizens Action Coalition that Duke doesn’t do enough to protect customers from cost overruns.

“It’s not a matter of us making that decision by ourselves, but rather working on rates with state regulators to come up, again, with the most economical plan and reasonable cost for our consumers,” Middleton says.

But Duke has asked for rate increases to cover the ballooning costs of its Edwardsport power plant in Gibson County, which was estimated to cost $1.9 billion when it was proposed and is now estimated to cost $3.5 billion, with ratepayers picking up an additional $700 million and Duke shareholders swallowing about $900 million.

But this is not a story of David and Goliath. Ron Holcomb says Duke and Tipmont work together and Doug Gotham points out power lines belong to a specific company, so there’s little chance to compete, unless new ones are installed.

Nonetheless, as Washington and the country writ large struggle with how to generate power and how to regulate it, West Central Indiana is providing a crucible for experimentation.

How customers react and what changes larger players like Duke make – if any – may go a long way to determining not if the power grid is remodeled in the next ten years, but how fast.