Community Solar

Sharing Solar is for Everyone

SunShot Initiative Helps Make Solar PV Cost-Competitive

By Jeff Brehm

While the cost of rooftop solar photovoltaic systems has decreased, a recent U.S. government survey found that only about 25% of residential rooftops provide acceptable locations for effective PV systems due to shading, building design and other issues.

Community solar offers a way to share the benefits of solar, even if the panels won’t work on an individual building. Residents, municipalities, companies and utilities are organizing projects that provide renewable energy and financial benefits to local participants. And in many cases, they’re using sites unsuited for traditional development.

The growing popularity of solar is thanks in part to hundreds of workshops on the subject provided by the Solar Outreach Partnership, part of the U.S. Department of Energy’s (DOE’s) SunShot Initiative, a national collaborative effort to make solar energy cost-competitive with other forms of electricity by the end of the decade.

“Solar PV is becoming much more cost-competitive … and the market has grown pretty substantially here in the last few years,” said Andrew Belden, director of state and city programs for Meister Consultants Group, which is part of the SunShot Solar Outreach Partnership. “What was a small, niche application five years ago is now a multibillion-dollar-a-year industry. There’s been an exponential curve in PV installations in the U.S. in the last few years, and all indicators are that this trend will continue.”

That’s caught the attention of a lot of consumers, but many of them can’t install PV systems on their homes.

“There are a significant number of people who rent or own a condo … who don’t have access to the roof or the land around it,” said Kathryn Wright, a Meister consultant. “Community solar is a way to overcome this barrier.”

The National Renewable Energy Laboratory (NREL) defines community solar as “one solar-electric system that provides power and/or financial benefit to multiple community members.”

Unlike group purchase programs like Solarize, or crowd funding programs such as Solar Mosaic, community solar projects can be developed by a special-purpose entity (owned by the participants or a third party) or can be sponsored or managed by a local utility. More than 40 are already established across the U.S., with 14 of those in Colorado.

“In participant-owned projects, individual community members invest money to develop a solar installation and they receive the net metering credits, so they benefit from the electricity,” Wright said. “In some cases they also receive renewable energy credits and investment tax credits, but this is legally complex and there can be local nuances.

“A third-party owner usually already has internal expertise with these kinds of issues, and handles any operations and maintenance,” she explained. “But the third party might take any direct credits for themselves … and they usually require a higher return on investment.”

In projects with utility-sponsored ownership, the utility owns the system or retains a third party to own and manage it. The utility allows its customers to purchase rights to the benefits of the PV system, such as net metering credits or “green power” purchases. More than 20 of these projects already are underway, with the majority administered by municipal utilities.

Wright and Belden provided three community solar case studies.

• EcoVillage in Ithaca, N.Y.: A condo association installed a 50-kW ground-mounted PV system, using a 15-year loan from residents and other incentives. Operational in April 2011, the $300,000 system serves 55 percent of the load of 30 homes. A new metering system allows owners to monitor electricity use and enables the system to accurately allocate credits.

• Brewster (Mass.) Community Solar Garden: In this 346 kW brownfield installation, a municipal lease was awarded to My Generation Energy. Of the 50 members of the system, who are guaranteed $1,400 in annual energy savings, more than half are unaccredited investors. Brewster gets lease payments and use of the vacant land; My Generation Energy gets renewable energy credit revenues and ownership payments.

• A Kit Carson Electric Cooperative project in Taos, N.M.: Under an agreement with Clean Energy Collective, a 98.7 kW solar canopy system was installed in 2012 at Taos Charter School. The co-op benefits from a 20-year power production agreement; Clean Energy Collective receives revenues for panel energy production, and utility customers get net-metering credits.

Belden also provided a “Solar 101” overview of technologies and market drivers.

“Germany has far less solar resource than just about anywhere in the continental United States. It’s working there, so it can work just about any place here,” he said. “And as solar prices keep coming down (from as much as $12 per watt in 1998 to as little as $3 per watt today), a lot of local governments and utilities are trying to figure out what to do as their customers are seeing the value solar can provide.”

Incentives are another driver. They range from federal investment tax credits and accelerated depreciation for eligible owners (for-profit companies) to state and utility rebates, solar renewable energy credits (SRECs) and net metering, which allows solar system owners to export excess power to the grid in exchange for credits. The latter group varies widely in availability and amounts, which can create confusion, but the SunShot Solar Outreach Partnership offers free technical assistance services that can help.

“Some of my colleagues in Europe asked me, ‘What’s the solar market like in the United States?’ ” Belden said. “The answer is, there isn’t a solar market in the United States – there are 50 solar markets. The rules and regulations and incentives in states are all different.”

Community solar also offers land-use value because it can be installed on sites with limited development potential, such as closed landfills, Belden said, adding “I was involved with a project in New Bedford, Mass., where they took a Superfund site that was completely useless, land that was kind of a burden to the city, and installed a 1.75-megwatt ground-mounted PV system that’s producing power for the community and also generating tax revenue.”

The growing number of solar parking canopies also are particularly exciting, he said, since “communities typically have massive amounts of parking space; you can turn that under-utilized space into a solar generating facility.”

Both consultants agreed the future looks sunny for community solar.

“It’s starting to drive conversations at the state policy level and we’re seeing more and more efforts to support legislation,” Belden said.

“If utilities get behind it, I think we’ll see a lot more community solar in the future,” Wright also said. “It doesn’t have the same problems they have with multiple distributed generators in terms of getting back their fixed costs.”

And no one should ever underestimate consumer demand.

“I think there are going to be a lot of calls for this from customers who don’t have any other way to take advantage of solar,” Belden added. “As they start to see their neighbors benefitting from this technology, there’s going to be pretty significant pressure from constituents to adopt these programs, and utilities and governments are going to have to be responsive to this.”

Courtesy of Sustainable City Network. Learn more at: sCityNetwork.com.

Contacts: SunShot Solar Outreach Partnership solaroutreach.org;  National Renewable Energy Lab (NREL) nrel.gov; Solarize Guidebook nrel.gov/docs/fy12osti/54738.pdf; Solar Mosaic joinmosaic.com.