LINCOLN–Nebraskans know that their state stands apart from the rest of nation in several ways. It has the only nonpartisan, unicameral Legislature, and since the late 1940s, it has also been the only state wherein all power utilities are publicly owned.
Today, proponents of renewable energies claim that the state has yet another opportunity to further separate itself from the pack by jumping on technologies like photovoltaic solar farms.
“Nebraska has a real chance to lead the nation in renewable energy, but instead, we’re letting Iowa do it,” said Michael Shonka, owner and president of the Omaha-based solar installation company Solar Heat and Electric, Inc.
It’s Nebraska’s sunlight prospects, said Shonka, that warrant giving solar just as much consideration as wind energy. Nebraska ties Alabama for the 13th highest amount of direct sunlight in the nation, behind states like Georgia, Arizona and California.
Iowa gets 26 percent of its energy from renewable resources, predominantly hydropower and wind, and was ranked in the top 10 best states for renewable energy by U.S. News and World Report. Nebraska lags far behind its neighbor in renewable energy investment, despite sharing the same general wind and solar prospects.
Why haven’t renewables, particularly solar, taken off in the state?
According to studies conducted this year by researchers at the University of Nebraska-Omaha, it isn’t due to a lack of interest. Of the 100 city officials surveyed (90 representing rural areas), 46 percent answered, “Yes,” to the question, “Would you ever consider solar?” while 34 percent were undecided. The sample included officials who identified themselves as either treasurers, city administrators, serving on the board of directors or mayors.
One major factor explaining solar’s slow ascent in the state is that, comparatively, Nebraska’s utility costs have remained cheap. According to the U.S. Energy Information Administration, Nebraska ranks 15th cheapest among all states for costs of electricity, at 9.04 cents per kilowatt hour on average. The national average is somewhere between the 31st and 32nd spots, at 10.42 cents per kilowatt hour.
In Hawaii, solar energy is just a part of life–not just because Hawaii is a tropical paradise, but because islanders desperately need to incorporate sources of locally generated power to mitigate their otherwise daunting utility costs. Even Massachusetts, not known for its sunshine, has a more compelling economic case for solar than Nebraska. Solar energy in Massachusetts is one-fourth the cost of fossil fuel energy.
Utility costs in Iowa are actually cheaper than in Nebraska, at 8.47 cents per kilowatt hour. But Iowa also offers state incentives for an array of renewable energy sources. Though several bills have been proposed in the Legislature, Nebraska does not offer incentives, making it difficult for solar to be a competitive alternative in the market.
The unique challenge of solar energy in the nation’s only public power state is that city administrators can’t take advantage of federal tax credits for renewable energy like the private sector can. Though solar energy prices are steadily decreasing, the costs associated with launching a sizeable public solar project are still too high for many municipalities.
According to the data gathered by the UNO researchers, 78 percent of city officials throughout the state of Nebraska said that the cost of installation was the number one reason for avoiding solar. Reliability was the second highest concern.
Solar is primed to be a disruptive technology, meaning that it could create new markets and displace existing ones. Disruptive energy technology could trigger what economists have dubbed the “utility death spiral.” Essentially, this concept entails a massive public utilities revenue loss stemming from a domino-effect of households switching to solar, creating exorbitant rates for the customers who remained.
Natale Ianno, an electrical engineering professor and researcher of solar cell technologies at the University of Nebraska-Lincoln, said that avoiding this “death spiral” could be the reason behind utility companies like the Lincoln Electric System moving to provide, install and net meter solar panels for their customers. Net metering refers to a utility company crediting the power produced by individual solar energy users to their monthly utility bills.
The rate pressure of a death spiral would fall hardest on the lower-income public power customers who likely couldn’t afford the upfront installation costs of switching to solar, said Chris Andersen, city administrator for Central City, Nebraska.
In theory, even these last remaining customers would ultimately be forced to opt for solar to save money. But, according to Andersen, town halls would fill up with disgruntled residents long before that moment.
In 2014, Central City, a town of 2,900, launched what is considered to be the first community solar project in the state. For local environmentalists and businesses alike, Central City has become the model for integrating solar into the public power structure.
this story is one of a three-part series on the future of solar power in Nebraska.
Contact Corey Oldenhuis at email@example.com