In a quest to become the world’s largest food company to get all its electricity from renewable sources, Organic Valley is planning a major investment in solar electricity that could substantially increase Wisconsin’s solar capacity and reduce electric bills for rural consumers.
A partnership between the La Farge-based cooperative, solar developer OneEnergy Renewables and the Upper Midwest Municipal Energy Group is expected to result in about 29 megawatts of solar capacity in up to a dozen municipal utilities across the Driftless Region.
Organic Valley has pledged to purchase renewable energy credits for 40 percent of that new capacity, which will offset the company’s electricity and subsidize green power for its neighbors.
“Our future demands bold new thinking about our sources of energy, and there is nothing more natural to a farmer than harnessing the power of the sun and the wind,” CEO George Siemon said in a news release. “So our cooperative is committed to achieving 100 percent renewable power, and doing it in partnership with the rural communities where we live and work.”
The nation’s largest cooperative of organic farmers expects to use about 18.9 million kilowatt hours next year at its offices and processing centers. That’s the equivalent of about 2,000 average Wisconsin households.
Organic Valley has solar panels on its buildings in La Farge and Cashton, owns half of a 5-megawatt wind farm, and has invested about $6 million in renewable energy systems over the past six years. But to build something on this scale proved to be impractical, even for a company with $1 billion in annual sales.
Organic Valley, coming off its second record-setting year with sales topping $1.1 billion, c…
“We just don’t have enough roofs or open space to put in that much solar,” said Jonathan Reinbold, head of sustainability for the cooperative. “We realized that this is going to be a bigger lift and the board wasn’t going to be pushing us to spend $20 million in capital.”
Eric Udelhofen, development director for OneEnergy, said the partnership catalyzed a larger scale development than it had originally planned and will allow the municipalities to purchase the electricity for less than what they currently pay.
The terms of the deal were not released, and the participating utilities will not be announced until the contracts are signed, which Udelhofen said he expects to happen later this month. UMMEG is a joint electric power agency representing 15 municipalities, including Cashton, La Farge, Viola, as well as the Minnesota cities of St. Charles and Lanesboro and Forest City, Iowa.
“We wouldn’t do it if we didn’t think it made good economic sense,” said Richard Heinemann, general counsel for UMMEG, whose members band together to buy electricity from Dairyland Power and other power providers. “We’re getting a good price, and we get to feel good about the fact that we’re partnering with a good company.”
With the addition of a planned 5-megawatt garden, Arcadia will get about 30 percent of its energy from renewable sources. Tim Putz, general manager of the municipal utility said the contract will also provide a hedge against rising energy costs.
“Really that’s what we need to look for,” said Arcadia Mayor Rob Reichwin. “We can’t just live with what we’ve previously done. What’s going to the be source not just now but for the next 20 to 25 years.”
In a further nod to sustainability, Organic Valley plans to plant native flowers and grasses around the solar panels to support bees and butterflies.
“We came up with a solution that’s not capital, no operations cost and is beneficial to the entire community in which the systems are located,” Reinbold said.
Founded in 2009, OneEnergy Renewables is a Seattle-based company that has developed solar farms on the east and west coast. Last week Xcel Energy announced it had signed a contract with OneEnergy to build a 1-megawatt community solar garden near Cashton.
OneEnergy has not released the total project cost. Udelhofen said construction is expected to begin in the summer and continue into 2019.
If fully developed, the project would increase Wisconsin’s current solar capacity by more than a third.
The clean energy advocacy group RENEW Wisconsin estimates the state will have roughly 80 megawatts of installed solar capacity by the end of 2017. That includes both consumer-owned rooftop panels and utility-scale projects, such as the 19-megawatts contracted in the last two years by La Crosse-based Dairyland Power Cooperative.
But even with the development, solar would account for less than 1 percent of the state’s 2016 capacity. The two largest technologies, coal and natural gas, account for more than 15,000 megawatts of potential generation.