Electrification Can Cause ‘Double Trouble’ for Cities and Towns

Taking advantage of upfront incentives from government and utility programs, municipalities in the Northeast are rapidly adopting electric technologies for buildings and transportation, reducing their dependence on fossil fuels.

This shift—primarily driven by the need to enhance operational efficiencies, achieve sustainability goals, and comply with evolving regulations—is transforming their approach to capital planning and energy consumption. Despite the reduced upfront costs and promises of technological advancements, this growing reliance on electricity can lead to huge increases in operational expenditures (OPEX) due to ‘double trouble.’ This article explores the concept of ‘double trouble’ and shows how strategic implementations of solar and energy storage solutions can help control these costs while enhancing the sustainability benefits of electrification.

What is “Double Trouble”?

‘Double trouble’ illustrates a potential financial obstacle of electrification. As the public sector adopts more electric technologies, their electricity consumption rises a lot leading to higher supply charges on their electric bills, as these charges are directly tied to usage. Additionally, to support widespread electrification, utilities must invest in grid infrastructure upgrades, including substations, transformers, cables, and overhead lines. These necessary enhancements are costly, and utilities in the Northeast have indicated that these expenses will be passed on to customers through higher electric rates. For example, in Massachusetts, Eversource and National Grid, are seeking rate hikes over five years to help finance about $2.4 billion in improvements, while three New Jersey utilities are seeking approval for rate hikes over five years to finance more than $1 billion in improvements. Consequently, cities and towns face a dual financial challenge: higher electricity usage coupled with rising rates, which together could place an ongoing strain on operating budgets, epitomizing the ‘double trouble’ scenario.

Electrification: The Source Matters

For cities and towns, electrification means transitioning to electric heating and cooling systems, adopting electric vehicles for transportation, and utilizing electric-powered equipment for various operations. However, electricity itself isn’t inherently clean; the source matters. Replacing inefficient boilers with electric heat pumps and introducing electric school buses are great additions, but the net environmental benefit shrinks if the electricity that powers them comes from natural gas power plants. Adding new solar installations to public sector properties, including rooftop and solar carport canopies, provides electricity from a renewable source generated onsite, reducing the need for costly, grid supplied power. 

Evolving Regulations for Energy Efficiency

While upfront incentives, operational efficiency, and sustainability goals are strong motivators for electrification, complying with emissions reduction regulations is a requirement. These regulations are already in effect in various forms across the Northeast. For example, the Building Energy Reporting and Disclosure Ordinance (BERDO) sets requirements for large, existing buildings in Boston to reduce their greenhouse gas emissions over time. Additionally, Massachusetts’ Large Building Energy Disclosure law goes into effect on July 1, 2024, and requires the reporting of energy use data for buildings over 20,000 square feet throughout the state. These regulatory changes underscore the importance of being proactive in energy management for legal compliance.

PowerOptions Solar & Storage Program 

For public entities looking to implement onsite solar and energy storage, navigating the procurement process can be both time-consuming and expensive. PowerOptions streamlines this process, allowing members to avoid costly consulting fees and reduce procurement complexity. There’s no need for a separate consultant to evaluate sites, scope projects, negotiate contracts, or oversee implementations because these services already are included in PowerOptions membership fees. The PowerOptions Solar & Energy Storage Program offers group discount pricing and pre-negotiated participation agreements, alongside dedicated program management from the PowerOptions team. This team provides guidance and ensures provider adherence to program pricing and service terms. Solect Energy manages site evaluation, project modeling, design, financing, construction, and ongoing operations and maintenance. Together, this partnership has successfully completed more than 150 solar projects in New England for cities, towns, and state agencies.

Case Study Profile: Fitchburg Public Schools (Fitchburg, MA)

Over the past eight years, Fitchburg Public Schools has strategically integrated solar technology into their infrastructure, aligning with their sustainability and financial goals. The rollout of solar projects has been carefully planned based on site readiness and detailed project modeling. To date, the district has completed three rooftop solar installations, achieving a total solar capacity of 948.6 kW, and generating 4,636 MWh of electricity which could power more than 15 million miles of electric car travel.

Remarkably, the solar-generated electricity from the two projects installed in 2017 costs just one-third of the price of grid-delivered electricity, resulting in an annual savings of $105,000. Additionally, a 625 kW solar canopy project is currently under construction at Fitchburg High School. The 20-year combined savings from these four solar installations is expected to exceed $4 million.

Carbon Emissions Avoided

Fitchburg Public Schools’ three installed projects have already made an environmental impact. As of May 2024, the CO2 emissions avoided is 2,781 tons which is roughly equivalent to 70,000 trees planted and grown for 10 years.

The Fitchburg Public School System is working hard to set an example of environmental awareness in our community. We are reducing our reliance on fossil fuels through solar installations at our schools in our effort to not only meet the Massachusetts 2050 Climate Goal of 85% reduction of greenhouse emissions, but to achieve net-zero energy consumption.

Jeremy Roche, Director of Finance and Operations, Fitchburg Public Schools

Taking Charge of Electrification

Ultimately, electrification is an opportunity to capitalize on upfront incentives, improve operational efficiency, enhance sustainability, and comply with energy mandates. Although the financial implications of increased electricity usage and rising electric rates can be consequential, effective strategies exist to proactively manage these impacts. By embracing electric technologies and renewable energy, and partnering with Solect, municipalities can take control of their energy future and establish a sustainable path forward while protecting their operating budgets.  

Next Steps

Contact us today about solar modeling and design coordination for this year, next year, and beyond. Email info@solect.com, call 508-598-3511, or submit form to get started.

Sources

• Electric Sector Modernization Plans (ESMPs) Information and Recommendations (Mass.gov)
• Eversource, National Grid seek hikes to upgrade the grid to handle surge in electrification (Boston Globe: February 16, 2024)
• NJ utilities say spend $1B more for energy efficiency (NJ Spotlight News: November 13, 2023)

May 8, 2024