Top 5 Criteria for a Winning State Shared Renewables Program

How States Can Create Community Solar Programs That Work

Shared solar programs – aka community solar programs – are cropping up across the country as a means to ensure more consumers can benefit from clean, renewable energy. As more states adopt these programs, they can learn from policies in place in other states to ensure that new programs are benefitting consumers and their communities.

Sixteen states and the District of Columbia have enacted policies that allow for shared renewables development, and other states are following their lead. For example, New Jersey recently approved a three-year community solar pilot program and New Mexico just introduced legislation that would expand consumer access to solar through a new community solar program.

In October 2018, IREC released its updated National Shared Renewables Scorecard, which evaluates state shared renewables programs using specific criteria based on national best practices. Though it can be used to compare state program attributes, it is more than a measuring stick for existing programs. It also sheds light on strengths and opportunities for improvement and allows policymakers to identify program design elements that lead to effective programs.

The scorecard grades active shared renewables programs using scoring criteria that reflect how shared renewable energy programs are performing — not just in terms of what policies and rules are in place, but also whether the programs are resulting in projects getting built and customers participating. The programs ranked the highest are designed to benefit consumers and expand access to renewable energy through the following criteria.

Top 5 Criteria for a Winning State Shared Renewables Program

1. Bill credit valuation – To generate interest from developers and consumers, programs must ensure that there is a clear value proposition for potential subscribers. IREC’s latest scorecard added a scoring metric designed to capture the ways in which programs are attempting to provide fair compensation to subscribers, including bill credits valued at the utility’s retail rate, credits that include generation and some portion of transmission and/or distribution rate components, or renewable energy credits (RECs) that are used to enhance the bill credit value.
2. Low- to moderate-income consumer participation – Low- to moderate-income (LMI) consumers are more likely to participate in shared renewables programs that offer immediate and substantial bill savings, so states should consider ways in which to promote greater LMI participation through financial incentives and other initiatives. One example is New York’s Bill Discount Pledge program, which allows low-income customers to use a portion of their monthly affordability program bill discount toward the purchase of a shared renewable energy program subscription.
3. Program Flexibility – Flexible subscription terms are also key for program participation. Explicitly allowing subscribers to take their subscriptions with them if they move within the utility service territory (portability) or transfer their subscription to another entity if they move out of the service territory (transferability) provides flexibility that is important to potential subscribers.
4. Data Transparency – Transparency is also an important factor. Requiring utilities to track program data and provide regular public reporting on installed capacity and other metrics can help stakeholders evaluate program success and track remaining capacity if the program is capped.
5. Strong Interconnection Procedures – Though interconnection standards are not a part of the program rules, it is critical that states have efficient processes in place to avoid interconnection delays.

IREC’s tools and resources – including shared renewables model rules and policy guidelines – help policymakers and stakeholders as they design and implement programs across the country. Like IREC’s National Scorecard, these complementary resources highlight best practices and offer guidance to scale successes more quickly. For states without statewide programs, IREC and Vote Solar’s checklist provides guidance and insights on best practices for voluntary, utility-led community solar programs.

As states seek to shift to cleaner energy sources, community solar programs can help meet clean energy goals while also ensuring that the benefits of solar are spread more equitably among consumers.

IREC’s Vision Summit on March 6^th in Washington, D.C. will be a visionary exploration of how policies and programs like community solar can better serve consumers as we transition to a 100 percent clean energy future. We invite all energy and equity stakeholders to attend this cross-cutting national event and contribute to the development of new strategies to ensure all Americans benefit from clean energy, now and into the future.

For more information on the Vision Summit, visit www.irecvisionsummit.org.

Mari Hernandez

As IREC’s Assistant Director, Regulatory Program, Mari tracks regulatory policy research and analysis and supports IREC’s state and national regulatory efforts.