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California City Solutions: Lancaster Maximizes Energy and Savings on Solar

April 24, 2015
This story is part of an ongoing series featuring Helen Putnam Award entries.
 
The 2014 entries are available on the League’s website as a resource for cities in a searchable database called California City Solutions. Solar Lancaster was submitted in 2014 for the Housing Programs and Innovations award category.Lancaster-Solar-mayor-Parris-at-elementary-(1).jpg
 
The high desert city of Lancaster has no shortage of sun. After being hit hard by the economic and housing market crash, Lancaster was determined to make the best of its relatively inexpensive and abundant land by encouraging the development of solar facilities.
 
Lancaster Mayor R. Rex Parris set an ambitious goal to become the nation’s first “Net Zero” city, generating 100 percent of its energy from renewable sources. After forming a partnership in 2010 with SolarCity, the city created a Joint Powers Authority and ultimately a new venture called Solar Lancaster. This innovative effort has saved the city and local school districts valuable funds, while attracting numerous solar companies and jobs to the region.
 Lancaster-SOlar-SolarCity-van.jpg
A retirement, military and bedroom community north of the Los Angeles basin, Lancaster felt the effects of the Great Recession. Housing prices dropped, while unemployment spiked from 7.3 percent in 2007 to more than 17 percent in 2010 and 2011. Abandoned developments and vacant lots tarnished the city’s urban areas, while fields along outskirts of Lancaster’s perimeter continued to lay unused; many of these agricultural fields had been abandoned decades ago.
 
Mayor Parris watched the recession take its toll on the city’s budget. The crisis had curbed revenue, but energy costs continued to rise. Services and infrastructure remained in high demand. The mayor brainstormed with staff on ways to further advance the city’s solar program. As they drafted plans and crunched numbers, they realized the potential revenue and tax savings if the city became its own utility, generating and selling solar energy. Lancaster-Solar-install-at-stadium.jpgThis idea led Lancaster to start with the area’s schools as the city’s initial step toward becoming Net Zero.
 
Lancaster hired SolarCity in 2010 to construct solar panel-covered parking lot canopies at the city’s Performing Arts Center, Municipal Stadium, two Park n’ Ride sites, the city maintenance yard, and City Hall. The city purchased the clean energy in bulk (the industry term is a Power Purchase Agreement) at a price of $.10 per kilowatt-hour (kWh) compared to the previous rate it had been paying of $.17 per kWh. Although this might have seemed like a small savings, it left Mayor Parris and the city council desiring more.
 
To help Lancaster sell energy, in June 2010 the city created a Joint Powers Authority. The Lancaster School District became the first client.  The school district had little experience in such capital projects, whereas the city had plenty of experience with construction and maintenance, and has a financial capability that school districts don’t possess — the ability to package bonds.Lancaster-Solar-install-SolarCity.jpg
 
City staff looked to private equity and secured a $26,860,000 bond to build the initial solar facilities. Lancaster is liable to pay off the bond, but the bulk of it will be received during the first five years because of a California subsidy which pays the city $.15 per kWh produced (as the client, the school district also shares in the savings, paying $.125 per kWh, which has saved them nearly $.07 per kWh.) Lancaster projects a $16.8 million operating revenue over the life of the bond.
 
As for unused land, Lancaster is turning many of its brown fields into solar fields. Because this agricultural land had been previously used for farming, solar developers did not face some of the environmental issues with undisturbed natural habitats.
 
The city also had two vacant lots that had been slated for development until the mortgage crisis hit, which now serve as mini suburban solar fields, with one project currently harvesting 4 megawatts and the other 2.3 megawatts of electricity.
 
In an effort to fully support Lancaster’s solar program, city staff have made it a priority to expedite the city’s approval process on solar projects. Large scale solar services are generally approved in less than four months, while similar projects can take years in other Los Angeles County locations. Residents adding solar to their homes can receive approval at City Hall in approximately 15 minutes. The teamwork of the city staff members with local schools and a number of solar companies resulted in 87.26 megawatts of electricity that’s currently being generated or under construction, bringing the city to more than 40 percent of its Phase I Net Zero Energy Goal of 215 megawatts.Lancaster-Solar-install-5.jpg
 
Approximately 1,500 acres of previously undeveloped land have been approved for solar projects, have had solar built on them or are currently undergoing the entitlement process. Most of these properties (1,462 acres) were previously fallow farmlands. Solar panels also embellish 25 of Lancaster’s schools, the city’s municipal structures, and a number of local businesses and organizations.
 
Lancaster’s Solar Program has had a great impact on the city and school district’s budgets. The city saves $50,000 per year on energy, while the school district’s savings is approximately $420,000 per year. Lancaster also profits from leasing land to private solar developers. One of the city’s lots, spanning approximately 16 acres, is expected to bring in more than $503,000 over its 20-year lease. The other lot, slightly larger than 9 acres, should produce close to $330,000 during its 20-year lease.
 
Lancaster issued its 1,500th single family residential solar power permit in November 2013. In collaboration with the city, KB Home has developed several cutting-edge alternative energy model homes in Lancaster, including multiple housing tracts in which solar is offered as a standard feature on all new homes. Lancaster has placed itself on the leading edge of the global renewable energy arena providing a successful scenario on what can be done at a municipal level.Lancaster-Solar-install-2.jpg
 
In 2012, Lancaster was internationally recognized for its alternative energy projects, receiving a World Energy Globe Award. Competing directly with revolutionary software developed in the Netherlands, and electricity pockets engineered to transform Israel’s Palestinian communities, the city took first place in the “Fire” (solar) category for utilizing public-private partnerships to create and expand new energy resources throughout the city and beyond.
 
The Lancaster community has been energized by the city’s effort to save and create more than 1,000 jobs, reduce energy costs and emissions, and spurring economic growth and environmental sustainability.


 
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