Getting a Fair Share of Solar
The U.S. residential solar sector has scored a first: During the first quarter of 2014, more megawatts of residential PV were installed than commercial PV, prompting cheers from industry observers. But while such growth demonstrates the mounting strength of the residential solar sector, opportunities for enjoying the benefits of residential solar are not unlimited.
The National Renewable Energy Laboratory (NREL) believes that in some areas of the country, as little as 25 percent of homes may be suitable for a PV system, due to physical limitations of rooftops, poor building orientation, and/or inadequate solar resources. Other hurdles that stand between residents and solar can include building ownership, easements and building restrictions, upfront costs of system ownership, and difficulties in obtaining financing.
Considering these limitations, how can residential solar maintain head-turning levels of growth, and how can more residential consumers join in? If only residential consumers could choose to utilize solar energy virtually, generated by systems installed somewhere other than on their own rooftops (or their landlords’ rooftops). But wait; they can! Shared renewables programs present just such an opportunity. Also commonly known as shared solar, community solar and solar gardens, IREC has been working to facilitate such programs for several years.
A shared solar program typically involves a single, larger PV system designed to benefit multiple electric consumers by allowing consumers to choose to invest in (or “subscribe” to) the program and receive a portion of the electricity generated by the system. Shared solar programs spare consumers a mountain of time and effort that would be required to explore a PV installation alone, while also allowing consumers to take advantage of the economies of scale associated with larger systems typically unrealized in the residential sector.
Program design and supporting policies vary widely across the United States. Currently, there are at least 50 shared renewables programs in 17 states, with nine states having established a policy guiding program design for such projects. Most shared renewables programs are shared solar projects.
IREC is helping to bring standardization to these programs through its Model Rules for Shared Renewable Energy Programs, which were co-developed by the Vote Solar Initiative. These model rules provide guidance for program administration, allocating the benefits of participation, valuing the energy produced by the system, and providing for the sizing, location, system ownership, and financing options. The model helps ensure that shared renewables programs expand renewables access to a broader swath of consumers and provide tangible economic benefits and flexibility to participants. Furthermore, shared renewables programs also should support existing renewables programs, rather than undermining them. Many shared renewables programs have been successful in meeting these aims; examples are described in IREC’s shared solar case studies.
IREC is actively engaged in regulatory proceedings surrounding shared solar program design in both California and Minnesota. These efforts build on IREC’s work in Colorado and Delaware, assisting those states in developing first-in-the-nation, statewide shared solar programs. In California, the three major investor-owned utilities have been implementing “green tariff shared renewables” pursuant to Senate Bill 43, enacted in September 2013. IREC has been involved in the development of all three of the major investor-owned utilities’ programs, with the goal of ensuring that participants’ bill credits represent an accurate valuation of the benefits and costs of the electricity generated. That means including the long-term benefits, while keeping non-participating ratepayers unaffected by the program (as required by the statute). California’s shared renewables programs are expected to be finalized in October, and customers will have access to shared solar beginning in 2015.
IREC has also developed a program concept in California to advance low-income customer participation in shared solar programs. Known as CleanCARE, this program concept leverages the existing subsidy for low-income energy customers through the California Alternate Rates for Energy (CARE) program. CleanCARE shifts the focus to invest in local renewable energy, including shared solar, and energy efficiency. The energy savings from these investments serve to offset participants’ bills to the same extent or more than under the current CARE program. IREC is currently exploring the most productive ways to advance the CleanCARE proposal in California, as well as other ways to expand shared solar access to low-income customers in other states.
In Minnesota, following the enactment of that state’s landmark solar bill in 2013, IREC has played a key role in the design of Xcel Energy’s Community Solar Garden (CSG) program. IREC has weighed in on a range of program design elements, including the appropriate rate and the removal of Xcel’s proposed program capacity cap. Tapping our experience from around the country, we drew heavily from our participation in the development of Colorado’s CSG rules and the implementation of Xcel Energy’s CSG program in that state, and coordinated with local stakeholders, including Fresh Energy and the Environmental Law and Policy Center.
As shared renewables programs continue to spring up around the country, more and more consumers will gain access to solar energy. The expansion of consumer choice and access to solar energy are laudable outcomes for all. So cheers to sharing!
Image: © Stuart Miles – Fotolia.com