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Fairfax directs staff to pursue municipal microgrid study as NEM rules change
Summary
Councilors asked staff to move forward with research and a procurement approach for a municipal microgrid and resilience hub at town facilities after a presentation on outages, NEM policy changes and third-party financing options. Staff will return with RFI/RFQ/RFP proposals.
The Fairfax Town Council on Aug. 5 directed staff to continue pursuing a municipal microgrid concept — combining updated solar, battery storage and possible third-party financing — after a staff presentation outlining outage history and changes to California's net energy metering policy.
Bridget Whippler, the town’s climate action coordinator, told the council that Fairfax experienced 13 outages from 2021–2024, averaging 3.5 hours each, and that the town’s existing NEM 1 contract will transition to NEM 3 next year. Whippler said NEM 3 cuts exported-solar credit values sharply — from roughly $0.47/kWh to about $0.05/kWh in her example — and therefore creates a stronger financial incentive to store and consume locally generated solar energy rather than exporting it.
"This new contract will reduce the profit that we make on energy sold back to the grid by tenfold," Whippler said, and recommended staff research solar-plus-battery models, financing options through third-party providers, and issuing an RFP/RFQ/RFI as appropriate. She noted the pavilion roof — which needs replacement and holds the town’s older solar array — could be synchronized with upgrades.
Council members asked about upfront costs, payback models and whether third-party providers would cover pavilion roof replacement. Whippler said some vendors include infrastructure upgrades in proposals and that financing models can be structured so town payments come from energy savings (energy-as-a-service). Council members also asked the staff to check warranties, existing interconnection agreements, and any remaining NEM 1 benefit before altering arrays.
Public commenters and climate advocates supported further study and asked staff to pursue available MCE grants and technical assistance. Todd Greenberg and another commenter urged the staff to document existing NEM agreements, installer warranties, and remaining NEM value before making any changes that could forfeit credits. Council member Kohler said she had connected staff to MCE contacts who could help assess incentives.
Council direction: staff will continue research, develop procurement documents (RFI/RFQ/RFP as appropriate), pursue potential third-party financing models that minimize town capital outlay, and return with proposals that include detailed NEM and warranty analyses.
