Community solar for community activists: What is community solar? Who owns it? Who benefits?

February 10, 2017

Community solar offers the benefit of solar to community members who can’t, or prefer not to, install solar panels on their homes. This allows everyone to access the benefits of solar energy, even if you live in an apartment building, under a pine tree, or rent an apartment. Community solar projects allow individuals, businesses, and organizations alike to purchase or lease a “share”.

Community solar began with a simple idea. People shouldn’t have to put a solar panel on their own roof to benefit from the electricity it generates. This idea is in the process of dramatically changing the way we get our electricity. In the digital age, it should be easy to take production somewhere on your local electric grid and attribute it to your utility bill account. Consumers no longer need to depend on analog wires and dials. Community solar, when done right, can provide solar access to everyone.

The National Renewable Energy Laboratory (NREL) released a study in 2015 that examined community solar’s potential. NREL found that community solar could account for nearly half of the solar PV market by 2020, if the market is allowed to fully develop. This is a critical question as community solar is currently only available in a handful of states. In order to change this, laws will have to be passed and utility regulations re-written.

The rules around energy generation and distribution in most places are not adapted to enable customers to use community solar to their benefit. Still, these barriers did not deter the many community solar pioneers around the country who wanted to benefit from solar.

One early example of community solar in action was a project completed in 2010 by neighbors in Hyattsville, Maryland. The University Park LLC was created by people who wanted to go solar, but were unable to do so because their roofs were shaded by tree cover.

The 35-member group incorporated as a limited liability corporation, allowing them to take the tax credit for the 22.77 kW system they installed on a nearby church. The church pays for the electricity generated from the system through a power purchase agreement. Group members each paid a $1,000 membership fee to join and each receives payments back from the sale of electricity generated by the system. The process the group used to allow its members to invest in solar required hours upon hours of research and the pro bono aid of an area law firm to ensure the group was following the law.

Inspired by the work and challenges faced by groups like the University Park LLC, community solar has taken off. A key driver of this growth has been the adoption at the state-level of legislation that allows this kind of collaboration to take place easily through “virtual net metering”. Virtual net metering allows utility customers to count the electricity generated from an off-site source against their own energy use. Virtual net metering simplifies the process by which individuals, companies, or organizations can benefit from solar that is not on their own roof.

Community solar’s popularity has grown to the point that now investor-owned utilities have recognized the competition it offers to their business model. They see real community solar as a threat because it combines the economies of scale from larger solar systems with the consumer benefits of rooftop solar. As reported in the Huffington ,Post, many utilities have tried to brand solar projects they’ve developed as ‘community solar’ in an effort to push green-minded customers to pay a premium for “solar” energy, and to diffuse public pressure that would allow community solar to flourish.

Most of these utility-offered models lack a key quality of real community solar. They don’t provide a net financial benefit to subscribers. Solar has reached the point where rooftop solar customers expect to see a return on their investment. Community solar participants should see one as well.

Community Solar Criteria

 

Does the project save participants’ money

  • Is the price participants pay less than what they currently pay for electricity?
  • Is there an additional cost to join into the project?
  • Do participants benefit from tax credits or renewable energy credits generated by the system?

 

Is it customer friendly?

  • Is the program easy to sign up for?
  • Can participants take the benefits of the program with them if they move?
  • Is it easy to cancel participation?
  • Can participants buy in small increments?
  • What is the length of the contract?
  • How are participants compensated?

 

Does it provide community benefits?

  • Is there community ownership or control?
  • Does the project provide local job opportunities?
  • Are there provisions for low-income participants?
  • Are there additional community benefits?

As community solar grows, it is inevitable that these consumer protection issues will arise with it. People want to go solar, but they deserve to know what they’re getting into. Working with the support of All Points North Foundation, a small, private foundation based in Boston, we’ve developed a list of criteria to evaluate the quality of a community solar project. These criteria can be divided into three categories:

  1. Does the project save participants money?
  2. Is the program customer friendly?
  3. How will this project benefit the wider community?

The last category, community benefits, is a particularly exciting possibility for community solar. Good community solar projects expand the market for solar by increasing the market for solar and removing solar’s high upfront costs. This in turn enables community solar to benefit low-income communities, local non-profits, and places of worship. Energy costs are a significant strain for low-income families and community organizations. A typical low-income household spends more than 7% of its income on energy costs, more than twice that of higher-income homes.

Washington, D.C. is in the process of using solar to ease this burden. In 2016, the city government launched a “Solar For All” program to use solar to reduce energy costs for 100,000 of the city’s low-income households by 50%. Details of the plan are still under development, but community solar is expected to play a significant role in the shared renewables effort. It is hoped that this program can become a model for others around the country. In this way, community solar can fulfill its promise of enabling everyone to benefit from solar.