State of Green Business
What’s new with community solar?
This article is adapted from Sarah Golden's Energy Weekly newsletter, running Thursdays. Subscribe here.
You might have heard people talking about "community solar" over the past month. Wondering why? Here’s your cheat sheet of what it is and why it’s in the news.
So — what is it? Community solar (sometimes called a solar garden or a shared renewable energy plant) is a solar power plant whose electricity is shared by multiple households, companies or institutions. It can be owned by the community or a third party. It can be an attractive option for places looking for clean energy because it:
Brings clean energy to homes and businesses that couldn't have solar systems — either because they rent or aren’t well-positioned.
Reduces energy bills for co-owners and subscribers through programs such as virtual net metering.
Brings emission reduction benefits to more people.
Ensures that clean energy is local. Unlike PPAs or VPPAs, the projects need customers before building a solar plant, and the model requires those customers are in the same utility coverage area (for the most part).
Proponents point out that community solar can:
Bring clean energy to more low-income and vulnerable communities, which means more people are benefiting from the clean energy transition.
Build more resiliency into communities. Community solar generates energy closer to the point of use, so it could pair with microgrids and storage.
Relieve transmission congestion, which can help bring more energy online without putting (even more) stress on the grid.
Opponents to community solar say:
It can get complicated. Community solar programs require extensive cooperation between the solar company and participating utilities to align subscriber information and billing terms, creating logistical issues for utilities.
Solar companies can shoulder complex issues to properly structure projects that comply with state and federal policy.
Where is community solar?
All over the place. As of 2018, 43 states had community solar projects that equaled a cumulative 1,387 megawatts. That amount is expected to jump to more than 3 gigawatts in the next few years, according to Wood Mackenzie.
Why is community solar trending right now?
Interest in community solar has been on the rise for the last five years. But, according to Google Trends, it’s not just my imagination — there has been an uptick in interest in community solar. March had slightly more Google searches for "community solar" than any other month.
There seems to be a lot of little things happening across the nation creating interest in this topic. Google Trends shows nine states are leading "community solar" Google search in March. Here’s why:
Legislation is expanding community solar:
Colorado: The state legislature is considering an act that would allow community solar to grow from 2 MW up to 5 or 10 MW, and would remove the requirement that users must live in the same county.
New York: March was a busy month for New York, with NYSERDA announcing a "Solar For All" program that included four community solar projects in the Mid-Hudson region, Cornell breaking ground on an 18 MW project and New York PSC capping early termination fees for community solar.
Illinois: Illinois is in the midst of a renewables boom. In March, the legislature proposed the "Path to 100" bill, that would, among other things, support 2.4 GW of community solar installation. The Illinois Power Authority opened applications for community solar projects in February and was flooded with nearly 2 GW worth of project applications — making some worry about a potential bust on the horizon.
New Jersey: The state’s board of Public Utilities approved an application process to kick off its new three-year Community Solar Energy Pilot Program. That process will open next week, and includes considerations such as equity, siting and community engagement.
New Mexico: The New Mexico House of Representative passed "The Community Solar Act" in February, which would allow for the development of community solar projects in the state. GRID Alternatives told Solar Power World that the legislation "sets a new bar for equitable community solar policy" by specifically including American Indian nations, tribes and pueblos in the bill’s language.
Some states want to pull back on community solar:
Minnesota: Minnesota’s utility Xcel wants to cancel its community solar program, created in 2013. The utility — which has a goal of 100 percent carbon-free energy by 2050 — says the program isn’t meeting its original goal of serving residences, noting that 90 percent of the participation comes from companies, nonprofits or government agencies. Proponents point out that community solar builds resiliences, brings development to the state and offers more electricity options.
States are celebrating community-solar firsts:
Massachusetts: In March, Massachusetts opened the state’s largest community solar and storage farm, which has 7.1 MW of solar and 3.3 MWh of battery storage.
Florida: Florida Power & Light (FPL) filed plans in March for what would be the largest community solar project in the country. The capacity — totaling 1,490 MW — would more than double the current U.S. community solar capacity.
Some states are still trying to work it out:
California: Although California is a leader in solar developments, the state’s community solar market is virtually nonexistent. The Public Utilities Commission approved two programs designed to support the market — the Enhanced Community Renewables program and the Community Solar Green Tariff — but challenges make progress slow. There seems to be no specific March development in California, indicating that people in California are probably just Googling community solar out of interest. Oakland did see its first community-owned solar project (7kW), as part of the People Power Solar Cooperative.
Community solar trends I’m watching
Opportunities for corporate buyers. As more companies are looking to run operations on clean energy, community solar offers the potential for local companies of varying sizes without the bandwidth to negotiate renewable procurement contracts an opportunity to meet clean energy goals. Last year, Organic Valley pursued this option. It teamed up with 13 midwest communities in a 31 MW community solar project with the goal of powering its operations with 100 percent renewable energy by this year.
Opportunities for municipalities. As more than 100 cities have commitments to reach 100 percent clean energy, community solar adds an interesting option to the toolbox. Municipalities could use these alternatives to power local operations as one solution to meeting ambitious goals.
Benefits to low-income communities. Community solar broadens access to renewables for low-income communities. It removes the split incentive barriers (low-income people are more likely to rent), which saves customers money and supports equitable economic development. Community solar is being leveraged by municipalities, including the Portland Clean Energy Fund and DC’s Solar For All. Groundswell, which develops community solar projects and manages customer subscription, focuses on serving low-income houses and businesses and is preparing to break ground on a Solar For All project this month. Executive Director Michelle Moore told me the organization expects serve 300 low-income households by the end of the year, saving on average $500 a year per customer. "It’s an ideal format for sharing power with low-income neighbors because you don’t have to own your own roof to get electricity and savings from community solar projects," said Moore.