January 26, 2010

Community Solar: Power and Ownership for You and Me

I like both of the words ‘community’ and ‘solar.’  I like that each stands independently, and I like what each of those words stand for.   But honestly, I really like them when they’re paired up. At it simplest, community solar projects increase access to solar, whether you own or rent or have a business.  It…

I like both of the words ‘community’ and ‘solar.’  I like that each stands independently, and I like what each of those words stand for.   But honestly, I really like them when they’re paired up.

At it simplest, community solar projects increase access to solar, whether you own or rent or have a business.  It doesn’t matter if your roof is shaded.   Community solar participants don’t have the usual up-front costs and longer term O&M costs.  The system is usually located in a highly visible public place, and participants receive credit on their electricity bills for the renewable power produced by the system.

Maybe now, I can finally go solar.

I spoke with Keyes & Fox’s Joe Wiedman about IREC’s current work with community solar issues.  Community solar will be the topic of an upcoming IREC webinar.  Stay tuned.

IREC:  Joe, community solar is becoming a rapidly growing phenomenon.  Where did it come from?

JW:  In my view, community solar’s roots extend back into the community wind movement as the basic issue – expansion of opportunities for citizens to invest in renewable energy – is the same.  Although community wind uses a technology that began as utility-scale generation, and is only now moving into smaller scale systems, community solar is approaching this issue in reverse by moving from on-site systems to larger solutions.

IREC:  Two of my favorite words: community, and solar, now in one phrase.

JW: They are strong words to put together, I agree.  At it’s most basic level, community solar is a model or policy designed to enable participation in renewable energy programs by groups or individuals who are typically unable to participate in options to green their energy supply.  More specifically, under the format of most renewable energy incentive programs, renters, homeowners with shaded or small roofs and persons in multi-unit buildings can’t participate in renewable programs because program rules mandate an on-site location for a renewable energy system, prohibit certain ownership structures or contain other program elements which effectively make participation by these groups impossible.  Community solar programs attempt to address these issues so that a larger community of persons can invest in greening their energy supply.

IREC:   ‘Greening your energy supply…’ one of the benefits of renewable energy power generation, and we, as community, benefit in lots of ways from a greener energy supply.

JW:  Many people are motivated to invest in renewable energy in order to meet their electrical generation needs with resources that are more environmentally friendly than traditional forms of energy production.  Meeting our energy needs with environmentally friendly resources provides myriad benefits to our communities and our planet – job creation, reduced use of water in the energy production process, reduced carbon emissions, and reduced loss of energy due to transport from distant energy sources are just a few of those benefits.

IREC:  This is beginning to sound like the PACE programs which, as you know, were the darling of innovative renewable energy polices in 2009.   Do you think community solar is headed in the same direction?

JW:  Yes, interest in expanding opportunities for participation in renewable energy via community solar is growing fast.  California, Nevada, Arizona, Washington, Colorado, Illinois, Vermont, Rhode Island, Massachusetts, and Maine are just a few examples of states where efforts are underway to institute community solar in some form.  It would be exciting to see community solar cement itself as a policy option as quickly as PACE programs have. However, there are a number of issues related to ownership of community solar, ability to utilize available incentives, and compensation for kWh credits to name a few which will need to be addressed before community solar projects can thrive. This makes community solar somewhat different than PACE programs which were a new incentive tool to nestle within existing programs rather than larger programmatic and policy changes seen for community solar.

IREC:  Let’s get back to your comment about community solar for renters or other people who have previously been unable to participate.     Community solar would enable more people to be involved, right?

JW:  Yes, it would.  And there are important reasons for doing so.  First, the groups discussed above contribute, through their rates, to the renewable energy programs that incentivize renewable energy. As a matter of basic fairness, therefore, these groups should be allowed to participate in the programs they help fund.  Second, if we want to see solar and other renewables reach their fullest potential, everyone who is willing and able to invest in greening their energy supply should be allowed to do so.

IREC:  Agreed.  As a former homeowner, I was unable to have solar on my roof because it was too shaded.   But I was able to participate in greening my energy supply by subscribing to Austin Energy’s Green Choice program. If Austin Energy were to implement a community solar program,  as an apartment dweller, I could directly invest in owning the generation rather than paying an additional charge per kWh for renewable energy generated from larger projects.  I like that already.  Are there different community solar models out there?

JW:  At present, there is no generally accepted format for community solar.  However, a successful program must address the issues by allowing customers to invest in a centralized solar facility that produces kWh credits seen on their monthly bills.

IREC:  I know there are community solar projects in Washington, Oregon and California.  They’re typically located in a highly-visible place, but they’re all different sizes.  What about the way their funding structures?  Who pays for what?

JW:  The most notable community solar projects are within the service territories of municipal utilities: Ashland, Oregon’s Solar Pioneers II; Ellensburg, Washington’s Community Solar Project; Sacramento Municipal Utility District’s Solar Shares Program, and St. George Utah’s SunSmart Program.  These projects were owned by the local municipal utility and seek to recoup the utility’s investment via customer subscriptions to the system.

IREC:  Are there other ownership options besides utility ownership?  What about third-party ownership of community solar installations?

JW:   Ownership by a utility is not the only ownership model that can work – third party ownership of a system by a solar developer makes just as much sense as utility ownership with the potential for a lot less risk for ratepayers. Allowing third parties to participate in community solar is a critical difference between the municipal programs mentioned above and IREC’s model.

IREC:   That sounds reasonable.  Any third-party community solar installations out there today?

JW:  I am not currently aware of any third-party community solar installations in the U.S.  However, as programs are set up, third-party owned systems will have an important role to play in the success of community solar programs given the ability of third-party owners to efficiently tap available incentives.

IREC:   So far, municipalities are out in front of the community solar issue.

JW:  Yes, municipalities have been among the central proponents in many locations. This may help explain why some of the first community solar models have been implemented by municipal utilities, though I think it is fair to say no one organization is leading the charge on community solar.  Community solar projects aren’t currently tracked in the DSIRE database.

IREC:  Community solar has obvious connections to IREC’s work with states on net metering and interconnection policies.  Will the community solar issue now be part of IREC’s state work?

JW:  Yes.  IREC recently received funding from a generous donor to assist in the development of community solar by identifying best practices in community solar and bringing these practices to the states.  Kevin Fox and I are working on this project.   IREC spoke about its work in community solar in its 2009 Updates and Trends Report which was released in October.

IREC:  Probably not a moment too soon.  Any idea when we might see IREC’s Community Solar Model?

JW:  We are working hard to get IREC’s community solar model ready for release by April.  Just like with net metering and interconnection, it will take some time for momentum to build, but I am hopeful that we can see states that are moving on this issue first have programs up and running by the Spring of 2011.

IREC:  And IREC is also planning on a webinar on community solar sometime this spring as well.  Lots to look forward to on this issue.  Thanks, Joe.