SHERIDAN — Solar energy has tremendous potential as an economic development tool and renewable energy source in the Sheridan area, but state regulations have hindered the ability of local governments and businesses to realize that potential, according to a recent study.

The study — which the city of Sheridan commissioned Sheridan-based consulting firm K-Coe ISOM to conduct using funding from a Wyoming Business Council grant — was meant to serve as a comprehensive analysis of the feasibility of developing renewable energy locally and identify potential strategies to encourage local development.

Brad Mohrmann, of K-Coe ISOM, told Sheridan City Council last week that the study was spurred on by the growing economic importance of renewable energy nationwide.

“This was not something we just came up with out of thin air — past planning processes and assessments in Sheridan have pointed to the fact that we’d be great for something like data centers and tech industries,” Mohrmann said. “And the reason why this is so important here is the tech industry especially is really relying on and leaning and pushing for renewable energy.”

Nationally, companies like Walmart, Verizon, FedEx, Walgreens and Albertsons — all of which have franchises in Sheridan — have played a large role in the growth of that trend. But while those companies use renewable energy at many of their facilities across the country, none of their local stores are equipped with renewable energy generators.

Mohrmann said his firm worked with the Maryland energy-consulting company Community Power Group, which has assisted communities nationwide with energy development, and determined that while the potential for generating renewable energy with local wind, water and geothermal resources is limited locally, the area has enormous potential to generate renewable solar energy.

In fact, Mohrmann said Sheridan has the potential to generate more solar energy than many East Coast states that have heavily invested in developing the technology.

“We’re far better than Massachusetts and New York and New Jersey, and they’ve gone all in [on developing solar energy],” Mohrmann said.

Despite the local potential — and the potential renewable energy development elsewhere in the state — Wyoming lags far behind neighboring states in terms of renewable energy utilization.

The primary impediment to realizing that potential, Mohrmann said, is the state’s regulatory environment.

Nearby states have offered incentives to businesses and residences that install renewable energy sources that Wyoming does not. But Mohrmann said the Cowboy State has a more fundamental obstacle to developing renewable energy.

Wyoming’s net metering law — which credits renewable energy users for the power they add to the grid — caps renewable energy generators at 25 kilowatts. That’s enough energy for an average-sized home, but companies like Walmart would need to generate at least 300 kilowatts to effectively power their facilities, Mohrmann said.

Legislators have explored increasing the state’s net metering cap, but legislation that would do so has been unsuccessful.

The State Legislature’s Joint Corporations, Elections and Political Subdivisions Committee has discussed a bill at its interim meetings that would allow businesses and residences that want to install a renewable energy system that would generate more than 25 kilowatts to negotiate a contract with utility companies during its interim meetings.

A similar bill passed in the House during the Legislature’s most recent session but failed without making it to committee in the Senate.

Mayor Roger Miller said the Wyoming Association of Municipalities has also discussed the potential benefits of backing legislation related to renewable energy development.

Councilor Aaron Linden pointed out that power companies that sell traditional energy have, and will likely remain, opposed to renewable energy development as it would cut into their business.

Mohrmann said while entrenched utilities have fought renewable energy incentives aggressively, their opposition may be waning.

Sheridan Public Works Director Lane Thompson explained that electrical providers could benefit from the excess power renewable energy sources would offer during windows when electricity usage is high, as it would allow their power plants to accommodate the increased demand for electricity without having to ramp up their production.

“Power plants…if you keep them slow and steady all of the time, they’re very efficient, they run very well,” Thompson said. “Peaks and valleys they don’t do well.”

Even without increasing the net metering cap, Mohrmann said the report shows Sheridan could benefit from the installation of renewable energy.

According to the report, Sheridan could install approximately 381 kilowatts of solar energy generation at the 12 sites it identified and save roughly $381,000 in net electricity over 25 years with the current net metering cap.

With a 300 kilowatt cap, the report states that Sheridan could install nearly 2,000 kilowatts of solar energy generation and save approximately $2,097,000 in electric costs over 25 years.

Still, Mohrmann stressed the greatest benefit of local renewable energy development could be the economic development opportunities it creates.

“It’s a good sales pitch for our town,” Mohrmann said. “We’ve got so much going for us — from our K-12 education to Sheridan College to mountain views to our downtown to our thriving arts scene — what we are currently missing is pieces like (renewable energy) that show we’re innovative, we’re embracing new trends.”