When I wrote about the American Rescue Plan Act (ARPA) of 2021 two weeks ago, I felt like we’d all just hit the lottery. Think about it: there is now $350 billion available to help states, counties, and cities recover from the pandemic. The one big question is:
How are we going to spend these once-in-a-lifetime federal checks?
While the Act is very specific about how much states, counties and cities will get (see calculator here) the details on how to spend the ARPA funds are vague. So vague, in fact, that many cities across the country are turning to third parties like the National League of Cities to get clarification from the U.S. Treasury on exactly how these funds can be spent. Unfortunately, recipients will likely get the funds—set to be distributed in late May—before they know exactly how they can be spent.
Sound like a blank check to local governments? Not quite. The Act does contain broad guidelines for community betterment, including services and resources impacted by COIVD-19. There are also non-COVID-19 carve-outs such as funds for investments in water, sewer and broadband infrastructure. Ultimately, it’s up to state and local governments to decide how their direct payments are spent.
For community decision makers, choosing the best ways to allocate these relief payments may be the most important decisions of their careers. Why? Because we the people want to see the funds go to real projects that benefit all and not just a few. Accountability and the ROI of projects will be under the public microscope.
One Place to Invest: Water and Wastewater Infrastructure
One of the most logical places to direct funding is to America’s aging water and wastewater treatment infrastructure. Because clean water and bathrooms are so ubiquitous in our daily lives, we tend to take them for granted. You know, out of sight, out of mind. But the truth is counties and cities are literally struggling with keeping their water and wastewater treatment plants online and functioning at the highest, safest levels without having to raise rates on customers. And no one wants to raise rates, especially as we recover from the pandemic.
According to a colleague in the wastewater treatment industry, most municipal facilities have little in the way of financial reserves. When improvements are made, they typically are funded through bonds, rate increases or loans. There are also grants available through federal and state agencies that help with these capital expenses. So it’s no surprise that municipalities across the country are expressing an interest in using ARPA funds for water and sewer related projects. The ROI is there. Who can argue with improvements to services so integral to everyday life?
The Case for Solar Power
I came across a helpful blog that outlines about 20 different potential water and wastewater treatment projects that could possibly be funded by the ARPA funds. Because I work with Solential Energy, a commercial solar solutions company in Carmel, Indiana, suggestion number nine caught my attention:
Fund energy efficient wastewater treatment facility upgrades.
Specifically, the blog suggested municipalities should consider the long-term benefits of solar installations. The relief payment will likely cover the capital costs related to energy efficient improvements. Why should a COVID-19 act cover water and wastewater treatment improvements? One of the biggest problems municipalities face is the high rate and cost of energy. The process of filtering wastewater consumes between 3% to 15% of the nation’s electrical power every year.
This is really solid advice. For the last two years, Solential has been deeply involved with helping municipal wastewater treatment plants in both Indiana and Michigan convert to solar power, the latest to go live are two plants in Carmel, Indiana. Although each city was different, the one thing they had in common was a need to realize reductions in their operating costs. And one of the most compelling ways to do it is to include self-generating solar to their energy supply mix.
Water and wastewater treatment plants can reduce their monthly energy costs by more than 50% by installing an onsite solar array. Even in cold Midwestern winters, a solar array will continue generating the power needed to process water and sewage. At the same time, solar energy is a fixed cost so plant operators are no longer subject to future rate hikes that then have to be passed along in the form of rate hikes to customers. Check out additional solar benefits for wastewater plants here.
I’ll share a quick example with you. A customer at a smaller wastewater treatment plant was spending $8,000 a month just to run the aerators. Now with solar, the monthly cost average $4,000. That’s nearly $50,000 a year that can be banked for future improvements. Further energy savings can be achieved by installing more energy efficient equipment.
With money now available to counties for water and wastewater treatment infrastructure, there is no better time to evaluate the impact of solar power on operating costs. In many ways it’s what I call a “two-fer” – federal money for the improvements and significant, ongoing energy savings.
The Community ROI of Solar Is High
While the ARPA doesn’t specifically point to green energy to counter the ill effects of COVID-19, it’s hard not to argue that solar energy is a healthier option for communities than carbon-based fuels. Solar creates an insignificant carbon footprint compared with fossil fuels. Research published in Nature Energy measured the full lifecycle greenhouse gas emissions of a range of sources of electricity out to 2050. It showed that the carbon footprint of solar, wind, and nuclear power are many times lower than coal or gas with carbon capture and storage. This remains true after accounting for emissions during manufacture, construction and fuel supply.
Communities love green renewable energy, whether it’s a solar array at a local school or municipal building, at a jail or even out of site at a wastewater treatment plant. People understand the value and when politicians invest in solar, it’s typically a win. The optics of solar are positive.
Are you seeking clarity in the ARPA opportunity? You’re not alone. Many states, counties, and cities know how many federal dollars are coming their way but are uncertain as to how they will be allowed to invest them. Keep in mind, the clock is ticking. The legislation states that municipal relief funds will only be available until December 2024. Even in ordinary times, completing water and wastewater treatment-related projects in a condensed time frame is a difficult task, which is why it’s so important to start the planning process as soon as possible. To get a better understanding of the steps and timing involved with a typical solar installation, check this informational article. Better yet, let’s connect via Zoom or face-to-face (with masks of course) and I will walk you through the process. Keep in mind that government projects typically require more time.
Connect with me at email@example.com or shoot me a text or call at 317-627-4530. The more you know upfront about solar for water and wastewater treatment plants, the better prepared your city or country will be when the federal funds arrive.