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The Indiana Municipal Power Agency (IMPA) received approximately $15.7 million of tax credit benefits plus interest through the Inflation Reduction Act for its work to develop renewable energy resources for its 61 municipal members. Since 2014, the Agency has constructed 51 solar projects throughout Indiana to serve the power needs of its member communities. Prior to passage of the Inflation Reduction Act (IRA), tax-exempt and governmental entities were unable to directly claim investment tax credits (ITC) to help offset renewable energy capital project costs. Historically, IMPA worked with third-party investors to access a smaller portion of the ITC benefits for many of the solar projects the Agency constructed to serve Member load. While the partnership with investors resulted in improved value for the Agency’s member communities, IMPA had to share a significant portion of the ITC benefit with the investors. With the passage of the IRA in 2022, tax-exempt and governmental entities may now directly receive the full value of the ITC for construction of renewable energy projects that meet qualifying requirements. Following passage and implementation of the Elective Pay ITC provisions in 2022, IMPA constructed seven solar projectsin its member communitiesin 2023. With the construction of these seven parks, IMPA added 24.7 MW of capacity to its portfolio, enough to power nearly 4,600 homes. The seven parks all met the requirements to receive $15.7 million of Elective Pay ITC for the projects, reducing the capital cost by approximately 32% “IMPA’s solar program has steadily grown since we first began building parks in member communities in 2014,” commented Jack Alvey, IMPA President and CEO. “With the implementation of the IRA and its Elective Pay option, our not-for-profit members are now provided the same incentive possibilities enjoyed by investor-owned utilities and other energy developers who invest in renewable energy projects primarily to receive the tax credit. IMPA’s direct receipt of the ITC goes directly and in-full to IMPA’s members’ customers. We appreciate the opportunities provided by the IRA for renewable energy development and the benefits they provide to the 350,000 people in our municipal electric communities, enabling IMPA to continue serving our members with low-cost, reliable, and environmentally-responsible power. ”

 For more information about IMPA’s solar program, visit www.impa.com/solar.

IMPA’s solar program reached its 10th anniversary this summer, achieving nearly 200 megawatts (MWs) of solar capacity through 50 solar parks established in member communities. Over the last decade, the program grew from a novel idea to a meaningful portion of IMPA’s overall power supply portfolio. The power generated by these solar parks contributes to the diversity of IMPA’s power resources, playing a vital role in the Agency’s mission of providing low-cost, reliable, and environmentally responsible electricity.

Back in 2013, IMPA and its Board of Commissioners were still unsure of the viability of solar power. While some investor-owned utilities were incorporating large, local solar farms into their power supply portfolio, IMPA was hesitant about the actual cost and performance of solar power generation. After careful study of the possibilities of solar, the IMPA Board approved small-scale demonstration solar projects comprised of three, 1-megawatt (MW) parks owned and operated by IMPA in member communities to further analyze the resource’s potential. With design oversight and construction in the hands of IMPA, and the solar parks constructed in three IMPA communities, the Agency’s staff and commissioners would directly learn from this pilot program whether more solar projects made economic sense for the Agency as a whole.

In 2014, three 1-MW solar parks came online in the member communities of Frankton, Rensselaer, and Richmond, Indiana and began contributing to IMPA’s portfolio. The Frankton and Rensselaer sites housed fixed-tilt solar panels that were permanently mounted southern-facing at 25 degrees from horizontal to maximize annual energy production. The Richmond solar park was designed differently, including single axis tracking panels that tracked the sun as it rose in the east and set in the west. These differences in construction design allowed IMPA to examine the efficacy of each for potential future projects.

These three solar parks performed exceedingly well in their first partial year of operation, generating 1.5 million kilowatt hours through 2014 and expanding IMPA staff’s knowledge of solar power. Since all three of the parks had also been constructed under their allotted budget, the Agency’s Board and staff were confident in developing more solar projects at even larger scales in a cost-effective manner.

Since 2014, IMPA has established 50 solar parks in 29 different member communities, most of which feature single axis tracking panels like the original Richmond Solar Park. The generation created at each of these parks is consumed within the member community that the park is in, directly benefiting utility customers. Each solar park also contributes to the diversity of IMPA’s power supply portfolio, which increases the reliability of the Agency’s supply. The communities with IMPA solar parks in their service territory benefit by IMPA keeping the investments local along with the property taxes that IMPA pays. The communities also can leverage these facilities in business attraction since renewable energy is increasingly marketable. These benefits only continue to advance as IMPA optimizes the solar construction process and finds new ways to create these opportunities at low costs.

“Through the years of learning, we’ve gone from contracting out the engineering work to completing all engineering work in-house, which contributes to cost saving measures and a deep knowledge base,” said Jack Alvey, President and CEO of IMPA. “We’ve established a fruitful relationship with Brandt Construction for construction management portions of our solar projects, and we’ve worked with taxable entities to achieve savings through federal investment tax credits before having direct access to the savings ourselves.”

IMPA is the only public power agency in the United States that has created, built, owned, and operated a solar program of this size and scale. The Agency’s unique strategy of building solar facilities in its member communities benefits IMPA’s power supply portfolio, member tax revenue, and overall transmission costs. With 10 years of success under its belt, IMPA looks forward to four upcoming solar parks in Richmond, Tipton, Veedersburg, and Winamac, which will bring approximately 13 additional megawatts online.

As the nation’s and world’s power supply makeup changes to include more renewables and legislation and policy changes create stricter regulations for power utilities, IMPA is prepared to continue providing reliable power to its member communities with assets like its solar program. The innovative ideas that IMPA explored a decade ago have allowed the Agency to safeguard its power supply portfolio over the last 10 years and the decades to come. In this way, IMPA’s solar parks allow for a bright future.

For more information about IMPA’s solar parks, visit www.impa.com/solar.

The IMPA Wire is produced on a bi-monthly basis to provide information about IMPA, the utility industry, and public power in Indiana. Read the May - June 2024 edition below.