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Larry Graham found himself scrambling when a farmer who had been renting a parcel of his land for three decades “kind of bailed out.” Graham, like many farmers, had to find a way to keep earning revenue from the land that has been in his family since 1842.
Graham figured leasing it for solar panels would be a good fit, and started doing research online. He came across a company called Solential Energy on Facebook and figured, “What the hell, I’ll call them up and pitch my idea.”
The timing was fortuitous, as Solential happened to be looking for land for a major array in partnership with the Hendricks Power rural electric cooperative that serves 35,000 members in central Indiana. Things moved quickly as they hoped to get the project underway before federal tax credits expired, Graham said, though thankfully the Investment Tax Credit was extended during the pandemic.
Now ground is being broken for a 7-megawatt installation of more than 19,000 panels covering almost 60 acres of Graham’s land — the largest solar array for a rural municipal electric cooperative in Indiana, and the largest array in Solential’s 13-year history. It will replace some of the power the cooperative buys from larger cooperative and wholesaler Wabash Valley Power Alliance (WVPA), which gets 35% of its power from coal, plus 28% from fixed-price contracts from other generators.
“Our solar array is independent of WVPA and we are excited that we are doing what we can to go up and beyond what is happing at the generation and transmission level,” said Dana Cochran, Hendricks’ director of corporate marketing.
In neighboring Illinois, solar advocates and residents have been frustrated by the difficulty in rolling out solar in electric cooperative territory, despite robust solar incentives in Illinois’s Climate and Equitable Jobs Act. But in Indiana, where there’s been little political support for solar and net metering recently expired, utility-scale solar arrays can be an attractive option for cooperatives, Hendricks Power CEO Greg Ternet said. He and Solential representatives recently announced the project at the local county fair, to a warm reception.
Graham sees it as a major win-win situation, as he’s now earning double the revenue compared to when the land was planted with corn and soybeans.
“It’s income stability, as opposed to having everything cash rent — you can’t put all your eggs in one basket,” said Graham, who recently retired to the land after 24 years working as a railroad brakeman and switchman in Chicago.
A third-party investor owns the solar panels that Solential developed, and Graham gets lease payments. Graham said finding the right investor was a somewhat tricky process, especially since he wanted to be sure there was a beneficial decommissioning agreement in place. “I’m 56; my kids will end up with this. I don’t want them to have a mess,” Graham said.
“I see it as kind of helping out the grid — you’re easing the load on coal-burning plants, and it makes for better power distribution across the grid. People are still kind of up in the air about [solar], but the way I look at it, eventually this stuff will really take off. Utilities have seen the writing on the wall.”
Ternet said that a 2018 change to Hendricks’ contract with Wabash Valley let Hendricks procure a portion of its own generation, paving the way for the solar deal. He thinks the 25-year solar contract will ultimately lower bills for cooperative members. The cooperative pays members who have their own solar avoided cost for the energy they produce, a rate significantly lower than retail rates.
“There is a portion of our membership that is interested in renewable energy,” Ternet said. “This project will give those members an opportunity to have renewable energy without having to invest in their own solar array, which can be very expensive. In working with Solential Energy we were able to develop this project at a cost comparable to wholesale power to bring a renewable energy source to our territory.”
Indiana does not have a binding renewable portfolio standard, and its voluntary standard calls only for 10% renewables by 2025. But Ternet said that doesn’t hamper cooperatives’ ability to do solar.
“This allows us to develop and build projects that make sense for the membership. In other states where utilities have to chase a mandate, cost is not always the first consideration,” he said. “That is the great thing about being a cooperative; we all share in our knowledge, workforce, and collaborate on projects together.”