Xcel Energy was the first investor owned utility in the country to announce a voluntary target to deliver 100% carbon-free electricity by 2050 and to produce 80% renewable electricity on their electric grid by 2030. However, there is still a gap that Denver must close between Xcel Energy’s carbon reduction trajectory and the city’s community-wide renewable electricity goal. Denver has significant untapped distributed energy potential that can help to close this gap, which is a key component of the city’s 100% Renewable Electricity Action Plan.
The deployment, integration, and management of distributed energy resources (DER), such as solar, battery storage, and vehicle-to-building (V2B) electric vehicle (EV) charging, is essential to support a 100% carbon-free electric grid. Access to DERs, however, has proven to be limited for non-profit Human Service Providers (HSP) and low- and moderate-income residents in Denver. The goal of the DER Incentive Program is to increase deployments of DERs including solar, storage, and V2B EV charging installations, while supporting a clean energy workforce and relieving the energy burdens of income-qualified households and HSPs in Denver. Additionally, Xcel Energy has recently filed for a rate increase that will increase electricity costs for customers including HSPs in Denver by more than 10%.
Denver's Office of Climate Action, Sustainability and Resiliency (CASR) is encouraging HSPs to pursue DERs because they will deliver significant benefits to the city and its residents, including the following:
- Reducing fossil fuel consumption and greenhouse gas emissions in the electric system. The carbon intensity of Xcel Energy’s electric system in 2020 was 0.474 metric tons CO2/MWh. An HSP such as a food pantry may consume about 100,000 kWh annually. Over 25 years, a solar system covering 100% of that HSP’s electricity needs would avoid about 1,185 metric tons of CO2 emissions.
- Increasing the resiliency of Denver’s energy systems. On-site and community located DERs such as solar, battery storage, and V2G EV charging can be used for resiliency as backup power and for peak control to lower utility bill costs associated with energy and demand charges. Additionally, DER assets can be leveraged by the utility to provide grid services on an ongoing basis during the majority of the time that they are not required for emergency backup power. These grid services include: (1) reducing system peak and localized feeder peak demand; (2) improved renewables integration; and (3) reducing overall system costs.
- Reducing utility costs to allow for greater funding towards human services. Lower operating costs for HSPs can enable more funding to go to the services they provide to the community.
- Evaluating strategies that lead to significant reduction in greenhouse gas emissions in buildings. The incentives awarded in this program will serve as valuable case studies for future efforts.
- Protecting public health and survivability for communities most burdened by climate change impacts, specifically low-income communities. Emissions of greenhouse gasses cause climate change, and one result of climate change is an increase in temperatures in Denver and, specifically, more days over 90 degrees and for longer durations. Hotter temperatures for longer periods exacerbate chronic health conditions and unhealthy living conditions for people living in low-income communities, which tend to have less green space outdoors and less access to in-home cooling (both are respites from heat). As part of the global effort to combat climate change, and in alignment with the targets set by the Paris Accord, Denver’s goal is to reduce citywide emissions 80% by 2050 to reduce this strain on residents. This program is one of many strategies Denver is implementing to achieve this goal.
To achieve the benefits stated above, CASR has established the goal of reducing the electricity-associated greenhouse gas emissions from each HSP funded by this program by at least 20% as compared to the emissions of the estimated average annual operations without the investments provided by this program.
CASR intends to meet this goal by offering a financial incentive encouraging HSPs to install DERs such as solar plus a battery storage system and/or V2B EV charging equipment. The program will provide a monetary incentive for non-profit HSPs by funding up to 100% of costs associated with the installation of the DERs. Without the incentives, HSPs are unlikely to adopt DERs and the ongoing operations and maintenance activities associated with them. The incentives will ensure a more rapid market adoption, leading to greater emissions reductions sooner. The technologies included and the levels of incentives offered by will be updated regularly as market conditions change.
CASR has determined that the incentive program aligns with the Legislative Declaration establishing the Office of Climate Action, Sustainability and Resiliency (Sec. 2-404 D.R.M.C.) as well as the Permitted Uses of Revenue in the Climate Protection Fund (Sec. 2-405 of the D.R.M.C.).