WASHINGTON, May 10, 2016 - More and more people are going solar even if they don’t own a home, don’t have a sunny rooftop, can’t afford to buy their own rooftop system, or simply don’t want the fuss of installing and operating their own system.
Led by rural electric co-ops responding to their members, what’s changed is the arrival of community solar, also known as “shared solar” or “solar gardens” or even “SolarCondo” ownership.
The Clean Energy Collective (CEC) helped launch this new own or lease option with a community-owned solar array near El Jebel, Colorado in 2010. Now CEC has developed more than 90 community solar facilities shared by individual households and businesses which each receive credits on their monthly electricity bills for their share of the electric power generated and delivered to the grid. CEC has partnered with 28 utilities in 12 states to create these projects.
The National Rural Electric Cooperative Association (NRECA) reports that “Seventy-two community solar projects are owned or contracted by electric cooperatives in 18 states, with at least another 29 projects planned in 17 states.” In total, 60 co-ops have community solar programs accounting for 29.3 MW of community solar capacity online, with another 38 MW planned. This NRECA co-op capacity is part of a national total 179 MW of solar capacity, with another 389 MW planned.
Along with other NRECA member co-ops, the Pedernales Electric Cooperative (PEC) in Texas is busy installing 15 MW of solar power, reflecting “member input and the economies associated with distributed generation” and zero-fuel-cost solar’s “low long-term operating costs.” PEC’s Energy Research Director Dr. Peter Muhoro calls community solar “the next step for PEC and other cooperatives” and says PEC is “looking forward to offering this and other new products and services to our members.”
PEC CEO John Hewa says his co-op, the nation’s largest, is committed to developing not just solar and wind to broaden its energy mix, but storage, demand response, and energy efficiency to provide its member-consumers with more options including generating their own electricity. As part of this shift, NRECA is an active partner with utility companies, manufacturers and environmental groups in the Community Storage Initiative designed to “rapidly increase the amount of energy storage available, and also integrate more renewable resources.”
NRECA Senior Communications Manager Tracy Warren says a key objective for co-ops’ solar programs is “finding ways to reduce the barriers” by providing financing options for community solar so that even low-income households can share the benefits. As part of this effort, NRECA is an active participant in the Energy Department’s SunShot Initiative designed to “enable solar-generated power to grow from less than 2 percent of the nation’s electricity generation portfolio to roughly 14 percent by 2030 and 27 percent by 2050.”
NRECA Co-op Owned and Purchased Solar Capacity
The National Renewable Energy Laboratory’s Shared Solar: Current Landscape, Market Potential, and the Impact of Federal Securities Regulation report concludes that “shared solar presents an area of tremendous potential growth for solar photovoltaics (PV), expanding the potential customer base to 100 percent of homes and businesses.”
Along with other studies, the NREL report shows that at least 49 percent of U.S. households and 48 percent of businesses “are currently unable to host a PV system” due to renting or a lack of suitable roof space. So the PV market is doubled where favorable state policies support community solar to allow multiple electricity customers to share the benefits from an off-site array of solar panels.
The NREL report released in April finds that by doubling the potential customer base for distributed solar when every power company customer has a solar option, “shared solar could represent 32 to 49 percent of the distributed PV market in 2020.” NREL says the result could lead to “growing cumulative PV deployment by 5.5 to 11.0 gigawatts (GW) and representing $8.2 to $16.3 billion of cumulative investment” by 2020.
The NREL report warns that solar installations could fall short of its forecasts if states withdraw incentives, cap the size of community solar arrays, or allow utilities to continue imposing higher fees on solar customers. But it also notes that as solar costs continue to drop due to economies of scale and greater penetration, and as more states back community solar, solar deployment could be “significantly higher than these estimates.” It adds that “Because shared solar overcomes many obstacles that have prevented many customers from adopting onsite PV, the market impact of shared solar may be greater than is estimated in this analysis.”
The non-profit Vote Solar interactive map at Shared Renewables HQ provides details on the 14 states and the District of Columbia which already have policies supporting community solar. These policies include allowing “virtual net metering” to credit a customer’s bill for power produced at a different location.
States with community solar policies now (yellow & red) or proposed (blue)
Other recent reports agree with NREL on the tremendous potential of community solar.
The Public Power and Rural Electric Leadership on Community Solar Initiatives report published by the Consumer Federation of America in April points out that “Public power systems and rural electric cooperatives have been leaders in developing community solar.” It adds that “While in the short-term investors often pay a higher rate for electricity, in the long-term their rates remain constant, so they are more assured of stable future rates than are other customers.”
GTM Research’s April Global Solar Demand Monitor forecasts “a 120 percent spike” in U.S. solar demand in 2016 as a result of Congress having extended the Investment Tax Credit for solar energy installations.
March’s Unlocking the Value of Community Solar report from the Deloitte Center for Energy Solutions notes that “In 2010, only two shared solar projects existed. Today 77 utilities administer 111 projects across 26 states, accounting for a combined capacity of about 106 megawatts.” Deloitte’s interactive map provides state-by-state details of solar mandates and pilot programs, virtual metering policies, deregulation and renewable portfolio standards. The report adds that in response to strong consumer demand, “rural electric cooperatives account for more than half of the nation’s community solar programs, although only 26 percent of U.S. electricity providers are co-ops.”
The Deloitte report concludes that “The evolution of community solar is a classic case of business model innovation turning a challenge into an opportunity. Foreseeing the inevitable growth of distributed energy resources, utilities are deploying these programs to get ahead of the game and to capture the benefits that distributed resources provide to the grid.”
February’s Accelerating Adoption of Community Solar report from the Solar Electric Power Association (SEPA) finds that “Both energy customers and the utilities that serve them are seeking to increase the proportion of electricity that comes from renewable sources.”
The SEPA report calls community solar “an attractive option for the 85 percent of energy consumers who either do not own their homes, have roofs that are shaded or not appropriately oriented, or simply do not want to invest in a solar system on their property.” It adds that utilities, “in response to customer demand for more solar options and to state and federal mandates and incentives, are finding that community solar is a potentially attractive way to satisfy and retain customers while complying with various mandates. Community solar programs also offer a way for these companies to gain experience in the distributed solar marketplace.”
For those interested in community solar options for their home or business, the Department of Energy (DOE) provides a breakdown of state policies and incentives for shared solar on page 41 of its Shared Solar report.
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