How Wind, Solar & Thermal Storage Saved Rural Minnesota Over $1 Million — A Leading Example of Beneficial Electrification in Action

In May 2025, our partners at Lake Region Electric Cooperative (LREC) marked a milestone on a beneficial electrification project that BEL was involved with in the earliest days of our organization. LREC, servicing 30,000+ members in rural Minnesota, has saved over $1 million in wholesale energy costs through its innovative Wind–Solar Hybrid Project paired with a cutting-edge Thermal Storage Pilot Program (see: How wind and solar saved Minnesotans over $1M and counting | Clean Energy Resource Teams)

LREC – A Local Renewable Powerhouse

Launched in 2019, LREC’s Wind–Solar Hybrid Project melds a 2.3 MW wind turbine with a 500 kW solar array. This locally generated renewable energy is now significantly lower than traditional wholesale power prices— to the tune of $200,000 saved annually—and has already surpassed those estimates. Particularly for rural Minnesota communities, where energy resilience and affordability are imperative, this hybrid model leverages native renewable resources, reducing strain on the grid during peak demand periods. BEL’s primary interest in the project is its role as a pioneer in “community storage” – a concept that BEL developed in its formative years when the organization was called the ‘Community Storage Initiative,’ from 2015–2018.

Harnessing Heat as a Battery

Building on their hybrid renewable success, LREC launched a Thermal (or “Community”) Storage Pilot. Participating homes heat the equivalent of at least 150 gallons of water between 10 p.m.–6 a.m. and again from 10 a.m.–6 p.m., only energizing the heating elements when surplus renewable energy is available. Roughly 45 % of members opted in—with little noticeable impact on daily routines—while actively helping LREC shift load,  allowing the co-op to rebalance peak demand and enhance grid reliability. This idea of using a water heater as a battery for community storage is a hallmark of LREC’s Generation and Transmission cooperative, Great River Energy’s, demand response program.

Pictured above on the left is a conceptual rendering of an electric water heating used as a thermal battery to store energy when it is available and low cost, a driving idea behind the formation of the “Community Storage Initiative,” which evolved into BEL. Above on the right is a Rheem large capacity water heater with Steffes technology that is a pivotal component of this beneficial electrification technology.

Participation by the Beneficial Electrification League (BEL)

The success behind LREC’s initiative was highlighted in early articles about the formation of the Beneficial Electrification League. Founded in 2018 by the National Rural Electric Cooperative Association (NRECA) and the Natural Resources Defense Council (NRDC), BEL’s mission was, and remains, to promote electrification strategies that are economically, environmentally, and operationally beneficial. A 2020 RE Magazine article featured the LREC project and emphasized BEL’s core pillars for evaluating beneficial electrification opportunities:

  1. Save money for consumers and providers
  2. Reduce environmental impact
  3. Enhance grid flexibility and resilience
  4. Improve quality of life for members and communities

The Lake Region pilot met all these criteria: lowering energy costs, cutting carbon emissions, enhancing grid flexibility, and matching member lifestyles. The article noted LREC as a tangible embodiment of BEL’s vision, and we are so pleased to see the results five years later.

From its earliest days, BEL has provided a platform for co-ops to adopt innovative technologies like grid-interactive electric water heaters. The 2020 RE Magazine piece positioned LREC’s thermal pilot as foundational, reflecting BEL’s proactive encouragement. LREC was among the first co-ops to translate BEL’s ‘definition in practice’—smart electrification that saves money, reduces GHGs, bolsters grid resilience, and improves lives—into a live, community-driven pilot.

The Road Ahead

LREC continues expanding. Scaling both its hybrid renewable assets and thermal load control will require more water heaters and perhaps integration with emerging technologies like EVs and heat pumps. For co-ops nationwide, LREC offers a replicable model: hybrid renewables paired with community storage to deliver cost savings, environmental benefits, and member alignment. BEL continues to share these lessons broadly through its electrification leadership forums, state chapters, and ongoing collaboration with partners and statewide co-op associations.

What This Means for Beneficial Electrification

  • Local Ownership, Global Impact: LREC’s renewable projects are owned and managed by the community, ensuring direct benefits flow to members rather than external shareholders.
  • Thermal Storage as a Grid Resource: Using everyday appliances like electric water heaters as utility load-shifting assets is low-cost, scalable, and non-disruptive.
  • From Pilot to Proof: The $1 Million saved and 45 % participation rate demonstrate commercial viability—not just a concept.
  • BEL’s Blueprint Realized: Founded on research and policy advocacy, BEL has moved from defining “beneficial” electrification to enabling real-world deployments.