A city in the heart of the oil state of Texas is set to become one of the first communities in the U.S. to wean its residents off fossil fuels.
The municipal utility in Georgetown, with about 50,000 residents, will get all of its power from renewable resources when SunEdison Inc. completes 150 megawatts of solar farms in West Texas next year. The change was announced Wednesday.
It will be the first city to completely embrace clean power in the state, which is the biggest U.S. producer and user of natural gas. More will follow as municipalities seek to insulate themselves from unpredictable prices for fossil fuels, said Paul Gaynor, SunEdison’s executive vice president of North America. Burlington, Vermont, made a similar move with its purchase of a hydroelectric plant last year.
“This will be the first of many,” Gaynor said in a telephone interview. “The city is making a judgment that they want to enjoy a stable electricity price.”
SunEdison will begin construction on the solar farms in the third quarter and complete them in about six months. Georgetown, about 28 miles (45 kilometers) from Austin, agreed to buy all the output over 25 years. That’s enough to supply about half the city’s residents, and the rest of their renewable energy will come mainly from wind. Terms of the deal weren’t disclosed.
“This will take the sting out of fossil-fuel volatility,” Gaynor said. “They’re using solar and wind as a hedge against rising fuel costs.” SunEdison, based in Maryland Heights, Missouri, expects to more than double solar and wind installations this year to 2,100 to 2,300 megawatts, up from 1,048 megawatts last year.
When complete, SunEdison plans to offer the Georgetown project for sale to its separately traded power-plant holding company TerraForm Power Inc., a so-called yieldco.
Texas, which rivals California for most sun resources, comes in 11th in installed residential panels, according to GTM Research in Boston. Most of the rooftop solar in Texas is in San Antonio and Austin, where the local utilities provide customers with statement credits for energy they produce.
While Austin and San Antonio have made efforts to become greener, no other city in Texas has achieved 100 percent renewable energy for all its residents, said Tom Smith, director of Public Citizen’s Texas office in Austin.
“Wind and solar are now lower cost than building a new coal or natural gas plant and they have no risks related to fuel costs or water shortages,” Smith said in an interview. “We in Texas know the excruciating pain that comes when natural gas prices spike and electricity bills go through the roof.”
Other companies are also offering services that will let cities rely on renewable power. SolarCity Corp., the largest U.S. developer of rooftop solar systems, said Monday that it plans to develop small power grids that will run corporate campuses, military bases and small towns, with a mix of solar power, battery storage and existing generators.
“Georgetown isn’t required to buy solar or other renewables,” Jim Briggs, general manager for the city’s utility, said in a statement. “We did so because it will save on electricity costs and decrease our water usage.”