Five Ways Your City Can Benefit from the “Solar in Your Community” Challenge

Offering $5 million in cash prizes and technical assistance over 18 months, the Challenge supports local teams across the country in their efforts to develop programs or projects that bring solar to their communities.

There are 19 megawatts of solar installed in the city of Portland. Pictured is the Oregon Convention Center. (Jeremy Jeziorski)

This is a guest post by Odette Mucha.

In 2016, solar energy was the largest source of new generating capacity in the United States. With more than one million solar projects now operating across the country, the U.S. has over 35 gigawatts of total solar installed capacity – enough to power the equivalent of 6.5 million average American homes. This is an industry that is growing fast.

Despite this rapid growth, however, solar energy remains inaccessible to nearly half of American households and businesses, as well as many local governments and nonprofits. There are several reasons for this:

  • Nearly half of all rooftops cannot host solar due to insufficient roof space, lack of control over the roof (renters, condos), or shading.
  • While the federal Investment Tax Credit has grown the solar market, it excludes individuals and organizations with no federal tax liability, such as cities, nonprofits, low income individuals, and retirees
  • Low income populations face even greater challenges, often due to poor roof conditions, lower than average credit scores, and lack of access to affordable financing.

And yet, these communities stand to benefit the most from going solar – from stabilizing their energy costs to reducing air pollution. Cities go solar through the Solar in Your Community Challenge, a program launched by U.S. Department of Energy’s SunShot Initiative to expand solar access to those who have, to date, been left out of the growing solar market.

The Solar in Your Community Challenge encourages the development of innovative financial and business models that serve low and moderate-income communities, local governments, and/or non-profits. Offering $5 million in cash prizes and technical assistance over 18 months, the Challenge supports local teams across the country in their efforts to develop programs or projects that bring solar to these segments of their communities, while proving that these business models can be widely replicated and scaled up.

Why should cities participate in the Solar in Your Community Challenge?

  1. Save Money on Municipal Electricity Bills

Local governments, which own approximately 10 percent of commercial buildings (schools, office buildings, public assembly buildings, etc.), spend approximately $14.7 billion on electricity – 12 percent of total commercial building expenditures (EIA data). Solar energy can cut cities’ monthly electricity bills and make funds available for other priorities.

  1. Create Local Jobs

The solar industry is a proven driver of job growth. As deployment has soared, so have solar jobs – there are nearly 209,000 solar workers in the U.S. today, with more than half of them in installation jobs that can’t be outsourced. Further, these workers are paid competitive wages, with installers making a median wage of $21 per hour.

  1. Help Low Income Residents

Low income households pay a large portion of their income towards electricity bills. An analysis by Groundswell found that the lowest income households spent nearly 10 percent of their income, over four times more than the average consumer. Access to low cost solar can provide price stability and bill relief to low and moderate income households.

  1. Improve Resiliency

Cities around the country are facing increased threats from natural disasters and are taking steps to plan for them. During extreme weather events, solar energy can help prevent outages, provide energy for critical facilities, and aid in recovery efforts. Solar can also provide energy to remote areas.

  1. Meet Environmental Goals

Using solar power instead of conventional forms of energy reduces the amount of carbon dioxide, nitrous oxide, and other pollutants that are emitted into the environment. Reducing the amount of pollution translates into cleaner air, reduced water consumption, and improved health.

Cities can participate in the challenge in two ways – as part of a program team or a project team.

Program teams create new programs that enable the installation of solar for use by low income households, governmental organizations and/or nonprofits. Program Teams will be led by governments, utilities or financial institutions.

Project teams develop and install a new solar system or a portfolio of systems that benefit low income households, governmental organizations and/or nonprofits using innovative and scalable business practices. Project Teams can be led by anyone, but should include a combination of key organizations like cities, solar developers, utilities, financial institutions and community organizations.

The application deadline to participate in the Challenge is March 17, 2017. Click here to learn more about the Solar in Your Community Challenge and apply today!

odette_mucha_125x150About the author: Odette Mucha is a Technology Manager at the U.S. Department of Energy SunShot Initiative. She is the manager of the Solar in Your Community Challenge.

A Smarter Way to Make Smart Cities

Though it may seem counterintuitive, small interventions powered by small companies can have almost as large of an impact on cities as expensive, big business projects for only a fraction of the price.

Songdo, South Korea has been billed as the world’s first “smart city.” (Image: Gale International)

This is a guest post by Isabel Munson.

Today, when we hear the term “smart city”, massive interventions powered by some of the world’s largest companies come to mind. Take the $35 billion+ city of Songdo, South Korea, which was built from the ground-up with the help of Cisco. The planned city boasts 16 miles of bike paths, 40 percent of its area dedicated to outdoor spaces, and a designation as the biggest project outside the U.S. to be included in the LEED Neighborhood Development Pilot Plan (and first LEED Accredited district in South Korea). Most impressive of all is the city’s pneumatic waste disposal system, which funnels garbage from every kitchen in the city directly to a central waste processing center. Only seven employees handle waste for the whole city, and there are no garbage trucks or cans on the street.

But how can you make a smart city if you don’t have several billion dollars or the ability to build a development from the ground up? Aren’t expensive projects by big companies the only way to make your city smart? Though it may seem counterintuitive, small interventions powered by small companies can have almost as large of an impact with a fraction of the price. The creation of small smart cities companies may seem unrelated to any municipality’s actions, but cities can do a lot to encourage and empower these innovations.

For example, the mayor’s office of New Urban Mechanics in Boston focuses on incorporating futuristic design and technology into the city’s development. Its willingness to invest resources and take chances on new technology has helped small companies succeed while ensuring that Boston remains innovative. I work for one of those small companies, Soofa, a MIT Media Lab spinoff founded in 2014. With the support of New Urban Mechanics, Soofa was able to pilot 10 pieces of smart urban furniture — solar-powered charging benches — just a few months after creating the first prototype.

Soofa CEO Sandra Richter with Boston Mayor Marty Walsh and the first Soofa protoype. (Mashable)

Soofa CEO Sandra Richter with Boston Mayor Marty Walsh and the first Soofa protoype. (Mashable)

The feedback gained from this pilot phase allowed Soofa to make major bench improvements and complete their first production run this spring, with benches being installed in eight U.S. states and three countries.

The new Soofa Bench, with changes made based on results of the Boston pilot program. (Soofa)

The new Soofa Bench, with changes made based on results of the Boston pilot program. (Soofa)

Across the river, Cambridge was also willing to take a risk on a new startup by being an early adopter of Soofa Benches and a R&D partner. The Soofa Bench features a sensor brain that detects the environment around it — from noise and nitrogen levels to humidity and temperature. Cambridge realized that this wealth of data gained from urban environments can be harnessed for more effective city planning, evaluating the efficacy of various programs and developments, and most importantly, helping citizens enjoy their urban spaces! As such, Cambridge was willing to be Soofa’s R&D partner as they develop the most comprehensive sensor brain and data platform possible. This R&D project was recently the feature of a Governing Magazine article which discusses in greater detail Soofa’s data collection capabilities.

So, why are small interventions better? When entrepreneurs envision ways to improve the city, they dream big, but are constrained by cost and practicality. The resulting products have big potential with a much smaller price tag. Installing a bench is much easier than retrofitting aged infrastructure with sensors, and more cost effective. A solar-powered bench can seem like an unnecessary expenditure, especially to smaller cities, but this investment enables cities to be more efficient and enjoyable in the future.

Creating a space where local entrepreneurs can have their city-improving ideas heard and potentially supported by city governments is critical to the creation of smart cities. Even if no investments are made, gaining the input of stakeholders from professors to designers and engineers is invaluable to future city planning. Chicago’s Array of Things project is another great example of a city using their valuable local academic and technological resources to create a low-cost, high-impact smart cities intervention.

A rendering of the Chicago Array of Things sensor boxes’ functionality. (Chicago Array of Things project)

A rendering of the Chicago Array of Things sensor boxes’ functionality. (Chicago Array of Things project)

Edward Krafcik, Director of Partnerships and Business Development at Soofa, participates in the Innovation Central expo pavilion at NLC's 2015 Congress of Cities in Nashville. (photo: Paul Konz)

Edward Krafcik, Director of Partnerships and Business Development at Soofa. Soofa was recently invited to participate in the Innovation Central expo pavilion at NLC’s 2015 Congress of Cities in Nashville. (photo: Paul Konz)

Chicago still took input from smart-cities giants like Cisco, but made a conscious choice to loop in local talent for the research and design behind the project. Though here we encourage cities to support small companies creating smart cities interventions, we must give big companies credit where credit is due. Without their push to encourage smart cities projects, smaller companies would never be able to sell their products or get funding — because no one would know what a smart city is! The research, awareness and funding from major companies in the smart cities space has been invaluable. That said, any city can be cost-effectively made into a smart city through small interventions powered by small businesses.

So, how do you future-proof your city? Prioritize the creation of civic innovation offices similar to New Urban Mechanics to support local talent and small businesses. Small, agile interventions end up having a big impact.

About the Author: Isabel Munson is the Data Strategy Lead at Soofa, an Internet-of-Things company dedicated to creating social, sustainable and smart cities. Her other musings on smart cities, #Soofatalk, may be found at www.soofa.co or @mysoofa.

Tying Business Incentives to an Economic Development Strategy

This is a guest post written by Ellen Harpel. Post originally appeared on the Smart Incentives blog.

Construction-in-SingaporeEconomic development initiatives like this construction project in Singapore are more successful when investment incentives align with the values articulated by the overall development strategy. (Getty Images)

Incentives are not just about winning a deal or completing a transaction with an investor. Smart incentive use is always connected to a larger economic development strategy.

Economic strategy

Any project for which incentives are offered needs to be evaluated in the context of community economic goals and strategies. Many communities have an economic development strategy, though perhaps of varying quality, and making sure that an incentivized project aligns with the broad statements and values within that strategy is an important first step. Unfortunately, a surprising number of communities either do not have strategies in place or do not align their incentive programs to those strategies. Community discussions on incentive use focus on the deal, not the reason for the deal. My work around the country has revealed that the public, elected officials and even economic development board members do not see how incentives are connected to the broader economic development mission, seeing them entirely as necessary evils to enable business recruitment.

Program goals

Policymakers are increasingly ensuring that individual incentive programs have clear goals, although we have seen that guiding legislation can be frustratingly unclear, making both implementation and evaluation difficult. Clearly defining the purpose of an incentive program helps ensure it will be used as intended. Otherwise, it runs the risk of being offered to all comers regardless of their capacity to connect to community goals. Communities also often have specific objectives related to supporting target industries or developing individual sectors of the economy. Economic developers may be urged to support small businesses or firms meeting certain demographic criteria. Economic development organizations often work with regional or national organizations and may need to align efforts with their broader strategies. Sustainable development may be a priority. These are all additional strategic factors that should be considered when assessing the basic project benefits that an incentives investment might generate. Good economic development organizations know their communities well and should be able to relatively easily assess whether a proposed investment aligns with community values on these factors, singly or in combination.

Ellen Harpel bio photoAbout the Author: Ellen Harpel is President of Business Development Advisors (BDA) and Founder of Smart Incentives. She has over 17 years of experience in the economic development field, working with leaders at the local, state and national levels to increase business investment and job growth in their communities. Contact Ellen at eharpel@businessdevelopmentadvisors.com or ellen@smartincentives.org. You can also follow her on Twitter at @SmartIncentives.

Using Data to Improve Accountability in Economic Development Programs

This post was written by Ellen Harpel, founder of Smart Incentives and president of Business Development Advisors LLC (BDA), an economic development and market intelligence consulting firm. Post originally appeared on the Smart Incentives blog.

Data-Blog-t

Data is one of the key elements of the Smart Incentives 4×4 framework that enables communities to make sound investment decisions. Unfortunately, good data on how well incentive programs work is often lacking. This lack of data hinders both economic development professionals in their day-to-day work and policymakers in their leadership and oversight roles.

Last year one report concluded unhappily, “We simply don’t have the information we need to make good decisions about incentives.” The Pew Charitable Trust’s widely-cited 2012 report, Evidence Counts, found that “half the state have not taken basic steps” to provide evidence of whether incentives work well or not, and “no state regularly and rigorously tests whether those investments are working,” though many states have taken valuable steps to begin to understand and evaluate the impact of their incentive programs.

Here we consider 3 data themes: available resources, challenges in data collection, and organizational advice to improve data management.

1. We have better data than ever on existing state incentive programs and past deals thanks to the Council for Community and Economic Research (C2ER) State Business Incentives Database and Subsidy Tracker 2.0 from Good Jobs First. These resources provide a great start for understanding the incentives environment. Further, many states are striving to improve the quality of reporting on their incentive use, providing new insights into existing programs.

2. We know we still need to improve data collection to assess compliance and outcomes associated with incentive deals, but we first must overcome substantial challenges. These include but certainly aren’t limited to:

  • Applying consistent definitions to the various measure of merit, including how we count jobs (all, new, over a baseline, full-time (by number of hours worked?), part-time), wages and investment
  • Accessing data sources to obtain and validate these measures by project
  • Determining project timing for compliance versus evaluation purposes
  • Tallying the exact cost of each incentive, both on a project and a program basis. This is particularly challenging for many tax–based incentives taken as needed over a multi-year period. Further, should costs be calculated by project? by annual budget impact? by program?
  • Deciding who should collect the data and how the data management effort should be staffed and funded

3. Enabling economic development organizations to address these data challenges requires significant effort, including the following critical steps:

  • Assembling a team with analytical skills as well as subject matter expertise. The team should encompass economic development knowledge, experience working with businesses, political awareness, analytical skills and information system expertise. You’ll probably have to look beyond your own agency to pull together the talent you need.
  • Asking the right questions to guide data improvements by defining the current situation, describing an improved state, focusing on the most important issues that need to be addressed, and agreeing on a desired outcome.
  • Collaborating with other agencies to collect data and share analytics expertise. Development finance entities, tax and revenue departments, and workforce or labor departments are all potential allies for data collection, analysis and verification of incentive use and compliance.
  • Setting expectations at senior levels for analysis and accountability in incentive programs. Staff must know that their efforts to track compliance and performance are important to the economic development mission and the organization’s leaders.

Smart Incentives works every day to provide state and local governments the data and analytics they need to identify what works and to enable sound decisions when awarding incentives. Founder Ellen Harpel is also pleased to be part of the Center for Regional Economic Competitiveness team working with the Pew Charitable Trusts on the Business Incentives Initiative, designed to improve data collection, management and reporting within state incentive programs.

HarpelAbout the Author: Ellen Harpel is President of Business Development Advisors (BDA) and Founder of Smart Incentives. She has over 17 years of experience in the economic development field, working with leaders at the local, state and national levels to increase business investment and job growth in their communities. Contact Ellen at eharpel@businessdevelopmentadvisors.com or ellen@smartincentives.org. Follow Ellen on Twitter @SmartIncentives.

State Incentives and Services for Entrepreneurs

This post was written by Ellen Harpel, founder of Smart Incentives and president of Business Development Advisors LLC (BDA), an economic development and market intelligence consulting firm. Post originally appeared on Smart Incentives blog.

NCSL-Report-Cover

Communities are increasingly supporting entrepreneurship as part of their economic development efforts, either as a complement to or replacement of business attraction strategies. State governments have created a variety of programs that communities and entrepreneurs can access as part of their local economic development toolkit.

Economic development groups increasingly use both financial and non-financial incentives (including specialized services) to support businesses in their communities.  A new report from the National Conference of State Legislatures (NCSL) describes a variety of state policies to support entrepreneurs, including financial incentives and other types of business services.

Capital and Incentives

  • Direct Investment — Quasi-public corporations provide venture capital to companies. Investments often have economic development goals (job creation or investment in targeted areas) as well as expectations of financial return.
  • CAPCOs — Certified Capital Companies (CAPCOs) are state-certified investment companies that sell insurance premium tax credits to insurance companies and use the funds to invest in start-ups. Returns are provided back to the insurance companies. NCSL reports that these have fallen out of favor due to the complex nature of the funding mechanism, lack of transparency and overly favorable terms to insurance companies.
  • Fund of Funds — State funds are invested in venture capital and private equity funds that will invest in businesses in the state and/or in targeted industries. States provide contingent tax credits to protect investors from losses.
  • Tax Incentives — Tax credits are available to angel investors who invest in start-up companies and/or venture capital firms. NCSL reports that many economists believe the credits are not effective since they are not likely to lead to investments that investors were not willing to make anyway based on the quality of the opportunity. NCSL also notes that data on the impact of these credits is “rarely available.”

Services and Other Policies

  • Simplifying the start-up process — one-stop centers for business licensing and registration; navigating state regulation
  • Integrating entrepreneurship into state economic development efforts
  • Promoting technology development, including tech transfer and commercialization programs
  • Developing entrepreneur networks to connect networks with each other, investors, customers, and other resources
  • Creating or supporting incubators (resources to support start-ups) and accelerators (for established businesses ready to grow)

About the Report

Promoting Entrepreneurship: Innovations in State Policy,” a Report by the NCSL Foundation Partnership on Jobs and Innovation can be accessed here.

In 2012, the National Conference of State Legislatures (NCSL) formed a new public/private partnership to examine the role of state policymakers in job creation and innovation through the NCSL Foundation. The partnership supports NCSL’s ongoing efforts to improve the quality of information available to state policymakers.

A key goal of the partnership is to improve the dialogue among state legislators, business representatives and other organizations interested in state policy decisions. The partnership convened a National Jobs Summit to bring state policymakers together with the private sector partners in September 2013 and is publishing a series of issue briefs on state policies related to job creation and innovation. Other briefs in this series include: “The State Role in Rebuilding the Manufacturing Sector” and “Workforce Development Initiatives: Collaborating to Prepare for Jobs of the Future.”

HarpelAbout the author: Ellen Harpel is President of Business Development Advisors (BDA) and Founder of Smart Incentives. She has over 17 years of experience in the economic development field, working with leaders at the local, state and national levels to increase business investment and job growth in their communities.

 

 

Contact Ellen at eharpel@businessdevelopmentadvisors.com or ellen@smartincentives.org. Follow Ellen on Twitter @SmartIncentives.