Community solar gardens: empowering consumers
Written By: Stratton Report
February 3, 2016
This continues our coverage of community solar. Stratton Report has run two recent interviews that focused on this trend; they can be found here and here
What once was considered to be an individual effort, installing solar panels to power residential homes is now becoming more of a communal effort, with a planned upsurge of community solar garden projects around the U.S.
Community solar projects, as opposed to rooftop solar panels, are large-scale, multi-solar panel gardens that gather energy from the sun from one specific location and transfer electric power to homes through existing utility company grids.
Consumers can take part in community solar projects if one is available in their location. Partnering utility companies will offer a program that will allow residents to purchase ownership in part of the garden. After being subscribed to the garden, utility companies credit customers’ monthly bills to compensate for the energy that is produced from their panel(s). Credits are usually split – a small portion is paid back to the project itself and the rest goes to the customer.
While community solar panel gardens are not very common, producing 65.9 MWdc in 2014, they are projected to produce 465 MWdc by the year 2017, according to a 2015 report from Green Tech Media, a research company following the solar industry.
The trend is turning toward community solar projects because gardens can serve practically anyone living near them. Residents can participate regardless of homeownership (you can be a renter) or the ability to pay high upfront and maintenance costs of panel installation, as is the case with rooftop installations.
Community solar can potentially serve 100% of the market, compared to rooftop solar’s ability to serve 25% to 50% of the market, said Tom Hunt, vice president for Clean Energy Collective in Carbondale, Colorado, one of the largest community solar developers in the nation. He was interviewed by Stratton Report on January 27.
The ability to purchase just one panel brings down the barrier of entry that stood high for low-income homeowners and renters. People that own their own home and have a roof can also benefit, as they can be relieved of the risk of panels breaking or not working, according to Craig Wetmore of BlueWave Capital, a solar developer in Boston, Massachusetts. His company offers a loan product for direct ownership in the facility without any liability of the panels themselves.
Community solar projects are becoming more popular because of “significant economies of scale,” according to Hunt. Community solar projects deliver a project that generates the same amount of electricity as a rooftop solar project at about 60% of the cost, he said. On top of low-to-no startup costs, maintaining a subscription in a community solar project is much more stable than rooftop solar. Moving homes would normally require abandoning rooftop solar panels. However, in a community solar project, subscribers can simply transfer their ownership to their new home, given they still live in the territory of the solar project, or transfer the subscription to someone who does. In many options, the benefits of the solar panels remain with the consumers in that territory and location.
Lastly, if financing is an obstacle to participation in community solar projects, companies like Clean Energy Capital are working to ensure their projects are eligible for PACE financing, government-sponsored loans for energy efficiency improvements.
A Case Study – Grand Valley Power in Grand Junction, Colorado
Customers of Grand Valley Power, an electric cooperative in western Colorado, are expected to save roughly $600 per year by participating in a new, 24-kilowatt (kW) community solar farm that launched in May 2015, according to Derek Elder, member services manager at Grand Valley Power utility company. Elder was quoted in Solar Electric Power Association Solar’s (SEPA) Solar Mainstream September 2015 publication.
The project was geared toward people with low incomes who wanted to take responsibility and ownership of energy production in their community. The GVP community solar project is “a hand-up, not a handout” for the co-op’s low-income members, Elder said in the report. It is voluntary and they get a chance to take ownership in a project that is accessible to anyone. Besides the eight hours of “sweat equity” it takes to volunteer to buy-in to Grand Valley Power community solar project, it costs roughly a 2-cent per kilowatt-hour administration fee, split between GVP and GRID Alternatives. GRID is the nonprofit organization leading Colorado’s $1.2 million grant program which is expected to build five low-income community solar projects over the next two years, according to SEPA.
With only 8 customers (and 10 on the waitlist), the 112 panel solar garden not only slices the cost of monthly utility bills, but also hedges against risks in other energy sources while stabilizing and controlling the energy environment.
The bright side; community em-power-ment
On the Grand Valley solar panels, owners happily hand signed the back of their solar panels, symbolizing their ownership and empowerment from taking part in the program, according to the Solar Mainstream report. It’s a growing trend. It is often reported customers inquire with utility companies to take part in ownership of solar panel projects, said Dan Chwastyk, utilities strategy manager with Solar Electric Power Association, in a December webinar titled Community Solar Performance Trends.
The GVP website states that owners of the solar project are democratic participants in the program, controlling the project and actively participating in setting policies and decision making. Community participation helps utility facilities, as well. More often than not, utility companies are happier to engage with a set of consumers that are local to a certain site, maintaining stronger and longer relationships, according to Chwastyk. The actual construction of the GVP-GRID project shows how community-owned endeavors successfully bring together the public and private sectors. As reported by Solar Mainstream, the “barn-raising model,” of the GVP-GRID project brought together GRID staff, solar job trainees, students and other community volunteers with GRID’s corporate partners like SunEdison, Enphase and Iron Ridge Racking.
Trends and Developments
Legislation facilitating community solar is a big help to its continued growth. Colorado and Massachusetts are leading the country in large part because of state policies that directly support community solar projects, according to Energy Sage Inc. While currently only 11 states have participating community solar projects, companies like Clean Energy in Colorado are eyeing every single state in the U.S. for potential community solar collaborations, although with a bias towards states east of the Mississippi, said Hunt.
“Community solar as a business model just came about in the past five to seven years,” said Hunt. “States on the east coast are just starting to look at community solar,” he said, and in states like California, where rooftop solar already took hold before community solar arrived, “there is a lot of doubt in the industry, whether it will result in very many projects being built [there].”
While the desirability of community solar may seem high, Wetmore of BlueWave Capital reiterated that only 3 to 5 of the states with community solar legislation or regulatory policies have projects that actually work. Programs can take up to two years to become operational after the decision is made to build, according to Chwastyk, and there isn’t much certainty as to which project designs work best. Utility companies are still deciding how to bill and credit customers for subscription, and optimal subscription rates to assure industry success.
Hunt reassured that as more utility companies offer consumers a direct tangible connection to a solar asset, programs will be successful while justifying the cost and effort to implement. One trend is certain, community solar is “beginning to infiltrate the grid more and more,” Chwastyk emphasized. Community solar projects are growing and they are becoming more widely available. In an energy environment in which more consumers are looking to lessen their impact, community solar programs can be an attractive model.
Picture courtesy of BlueWave Capital of their project in Holliston, MA (http://bluewave-capital.com/projects/holliston-ma/)