The city of Cambridge, Mass., famed for being the home of Harvard and MIT, as well as the birthplace of the Continental Army preceding the American Revolution, is a town of immense wealth, historical heritage, and very old buildings. As the fourth largest city in the state, Cambridge has several things that make it unique. It has the second highest population density of any city in New England, after its neighbor Somerville, and of its “mature” building stock, university buildings account for a staggering 25% of total built square footage. And close to two-thirds of city residents are renters.

To the city’s credit, as well as the universities and commercial enterprises that call Cambridge home, wide-scale efforts to decarbonize building operations have been taking place for over a decade. (Cambridge’s “Getting to Net Zero Task Force” was created in 2013, and its Net Zero Action Plan was adopted in 2015, with the established goal of making the city carbon neutral by 2050.) These developments have been aided thus far by progressive actions at the state level, like solar incentives and Massachusetts’s Renewable Energy Portfolio Standard, which requires a certain percentage of the state’s electricity to come from renewables. (In 2023, renewables–mostly solar–made up 34% of in-state electricity production; natural gas largely made up the remainder.)

There is wide agreement, however, that efficiency gains and electrification efforts on the ground won’t be enough to get to net-zero emissions. According to Meghan Shaw, outreach director with the Cambridge Energy Alliance, “We realized we are going to run out of roofs before we have the ability to create enough carbon savings with on-site solar … [We are going to need] a much bigger and more impactful renewable energy strategy.”

Entering the credits market

Late last year, the City of Cambridge entered into the largest-ever virtual power purchase agreement (VPPA) for a U.S. city. VPPAs are contracts in which large enterprises purchase renewable energy certificates (RECs) from large renewable energy projects. These financial transactions incentivize the continued development of new, affordable, utility-scale renewable projects and consequently help drive down the costs of using solar and wind energy. And because the agreements are “virtual” (power is not physically delivered to the buyer), the transacting parties don’t need to be in the same state or even connected to the same grid.

That is very much the case here. Cambridge residents and businesses that get their energy through the city’s community electricity aggregation program will earn credits for emissions reductions made by Prairie Solar, a 135-megawatt, 800-acre solar farm being developed in Champaign County, Ill., slated to be operational by summer 2026. Early estimates have the value of those renewable energy certificates as roughly equal to the average annual energy consumption of 25,000 homes, representing almost half the city’s residents.

This latest VPPA with Prairie Solar follows a similar one, finalized last November, in which credits from a wind farm in Bowman, N.D., will go toward powering all Cambridge schools and city buildings. That virtual agreement, while smaller than the Illinois one, will effectively make the city’s public buildings carbon neutral starting in 2026, once the wind farm is online.

Collectively, these VPPAs highlight a critical facet of the so-called renewable energy revolution. “We’re a dense city [and] we’re a small city,” Shaw says. She further cites how Cambridge’s combined municipal and community loads are “quite small” relative to the electricity demands of large corporations, or the purchasing power of regulated utilities. Given the commonality of these traits in and around smaller to midsize urban areas across the country (and especially in the Northeast and Mid-Atlantic regions), investing in utility-scale renewables through virtual agreements made the most sense.

Pooling resources

The complex and sophisticated nature of VPPAs requires a facilitator that understands how to navigate these transactions. With the North Dakota wind farm, Cambridge became part of the Consortium for Climate Solutions, along with Harvard, MIT, Mass General Brigham, and the nonprofit PowerOptions, which pools together municipalities and nonprofits to “collectively negotiate for competitive energy prices.” The consortium was facilitated by 3Degrees, a climate strategy advisor.

The Illinois VPPA, which will largely benefit Cambridge’s residential market, was facilitated by Boston-based Sustainability Roundtable Inc. (SR Inc.), through the advisor’s Net Zero Consortium for Buyers (NZCB). The NZCB acts as an aggregator of utility-scale clean energy, helping cities and corporations procure credits through VPPAs. “Cambridge should be an example to all municipalities around the world,” says Jim Boyle, SR Inc.’s CEO. “The city has A1 credit. For 400 years they’ve done nothing but be impressive financially.”

Boyle also notes Cambridge’s population density and limited footprint, citing those factors for why the city “had to go somewhere else for most of their clean energy electricity.” And, he asks, what better place than “carbon-intensive” southern Illinois? The economics are compelling, Boyle continues, and “the carbon abatement is superior because southern Illinois is coal country. Replacing coal with solar and integrated batteries makes sense all day long!”

The co-benefits of renewable investments

VPPAs effectively catalyze clean energy investments in places that need not only those sources of power but the associated tax revenues as well. And in each instance, it is critical to note that Cambridge is not purchasing electricity directly from Illinois or North Dakota; rather, the city is investing in economies that are weening themselves off fossil fuels. Cambridge’s commitments to purchase RECs are also enabling the developers of these solar and wind projects to secure the necessary financing to build them in the first place. (No one builds a shopping mall without first securing an anchor tenant.)

Shaw rightly observes that Illinois’ and North Dakota’s respective grids are “much dirtier” than the Massachusetts grid. “If you were to pick up our North Dakota projects and somehow build it here, or anywhere in New England, the amount of carbon abatement would be less.”

Julie Wormser, Cambridge’s chief climate officer, acknowledges, “We’re certainly getting headwinds from D.C. right now. That makes our work more difficult, but no less critical. This is a time when local and state governments are at their most creative.” To those ends, she cities related efforts like Electrify Cambridge, a free consulting service, launched in 2023, that helps residents with home electrification upgrades; and workforce training programs through Mass Save. The city also recently launched a feasibility study to look into creating Thermal Energy Networks.

“If something doesn’t work, it’s not a failure; it’s data!” Wormser proclaims, clearly indicating that whatever the end results, the means are justified. “We want to lower the bar for other people.”

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Justin R. Wolf is a Maine-based writer who covers green building trends and energy policy. He is the author of Healing Ground, Living Values: Stanley Center for Peace and Security, published by Ecotone.