The East Phillips neighborhood of Minneapolis is a 150 acre mix of residential and heavy industrial facilities that is home to approximately 4,800 residents on the southside of Minneapolis. Over 88% of the residents are minorities, and 45% of the population lives below the poverty line. The City of Minneapolis has purchased an 7.6 acre industrial lot that currently contains a 272,000 sq. ft. warehouse. The City plans to redevelop the site with a mixture of buildings that will contain offices, warehouses, and vehicle maintenance shops for City employees and vehicles.
The East Phillips neighborhood association is requesting that the City set aside some of the site for a Community Solar Garden and an "Urban Farm" that would provide green power, green jobs, and healthy food alternatives for the low income residents of the neighborhood. The City is willing to provide some space for green infrastructure, but as a public entity, the City can not take advantage of the tax credits, depreciation expense, and carry-forward loss provisions that enable private solar developers to finance such projects with paybacks of 7 - 8 years. As an example, a private developer can construct a solar garden and payback the investment within 8 years charging a fixed price of $0.115/kWh of electricity. A public entity constructing the same garden would have to charge $0.189/kWh to have a project payback of 8 years.
This project would use the seed money grant to work with local NGO's to sign up the East Phillips low income residents as subscribers to any garden that would be built on the site. The City of Minneapolis would take responsibility for the RFP process to select the developer and ensure that the resulting garden is built correctly. If this project were to receive any of the final prize money, that amount would be paid to the developer in exchange for lower electricity pricing for low income subscribers. We estimate that the price could be reduced by $0.010/kWH for every $100,000 of subsidy for the construction of the garden.
The project has the advantages of several neighborhood groups and NGO's willing to participate in recruitment of low income subscribers, a plot of land that could be leased to the developer at negligible cost, an experienced solar team at the City to oversee the bidding and construction of the garden and a stable site where the garden will not be threatened by future land development.