Community Solar
Community Solar — We’re All in This Together By Philip Hall, Director of Marketing & Communications
New York, Massachusetts, Colorado, Minnesota and California are leading the pack in implementing innovative programs and policies that expand access to solar electricity for those that can’t afford it on their own or who own properties that aren’t ideal for solar. These programs, referred to as community solar or shared solar, reduce energy costs for low- and moderate- income ratepayers and small businesses, and in some cases help utilities meet renewable portfolio standards (RPS). Support for shared solar goes all the way up to the federal level. The White House recently annouced the National Community Solar Partnership to increase access to solar for all Americans, specifically low- and moderate- income communities. With the cost of solar photovoltaics at historic lows and the continued growth of the solar industry, programs like community solar that expand the market for renewables will have a significant positive impact on the nation’s economy and progress toward energy independence.
Why Community Solar? “The traditional panels-on-your-roof approach simply doesn’t work for a majority,” said Sean Garren, northeast
www.BorregoSolar.com
regional manager for Vote Solar, a national solar advocacy organization. “Families who rent, who have low credit scores, or who lack significant savings face real barriers, yet those same families have the most to gain from the utility bill savings of affordable solar power.” Historically, solar energy has only been available to businesses and homeowners with either enough capital to afford the technology, or good enough credit to utilize a variety of financing options available, such as leases, power purchase agreements and loans. Another barrier for many customers is the physical characteristics of their property, such as having too much shading from trees or nearby buildings, limited square footage, or unfit roof structures. Think of all the tall apartment buildings in metro areas that have a relatively small footprint compared to their energy load. Those same rooftops can be old and need replacing or even require structural retrofits in order to handle the weight (load) of the solar panels, racking, and inverters. Those same roofs typically house skylights and or HVAC equipment that can limit the usable square footage for solar too or make the design cost prohibitive.
[email protected] 888-898-6273
Property ownership can be a hurdle to overcome as well. Tenants of commercial properties may have an interest in going solar, but becasue they don’t own the property they usually don’t have a say in whether or not a solar project is built. The affordable housing sector has embraced solar for years, but the energy generated typically only offsets the load from common areas (e.g. laundry facilities, lighting in parking areas and hallways, security cameras) and isn’t applied to the tenant’s energy consumption. By only reducing non-tenant related energy demand property owners and management companies are seeing all of the energy cost swings. However, in rare cases those savings do trickle down to the tenants, but when they do, the amount of those savings are negligible. With community solar programs in place, tenants in multi-unit housing complexes, small businesses with varying levels of credit, and property owners with aging facilities or shading constraints, can circumvent the typical roadblocks and opt-in to purchasing solar from a shared renewable energy project.
How Does it Work? In different markets they call it different things: community distributed generation, shared renewables, community solar, and community net metering to name a few. Regardless of what you call it, these programs offer customers the option to buy power from a solar project built at a remote site and financed by some other entity. Customers, referred to in this context as subscribers, can choose to opt-in or out when they want, so they don’t have to make energy purchasing decisions today that will have ramifications in 20 years. Subscribers will receive utility bill credits for their portion of the energy produced by the system. They don’t have to own the property where the solar project is hosted. They don’t necessarily need investment grade credit to secure the funds to finance these deals either. They just have to raise their hand and say “I want to use clean power from the sun!”
www.BorregoSolar.com
What Actually Happens? First, a solar developer identifies a property that is ideal for solar. Typically the larger the property the better to take advantage of economies of scale and provide more power to participating subscribers. Once the site is identified, the developer and property owner negotiate a lease agreement, by which the property owner receives lease payments, and in return, will allow the solar developer to construct the solar project on their property (roof, land, parking lot, etc.) where it will operate for the term of the lease (typically 20 years). This is similar to a standard landlord and tenant lease agreement, only the tenant is a renewable generating asset. While the solar project is being designed, engineered, permitted and constructed, the developer will market the proposed project to potential subscribers, in either the private or public sectors nearby, to secure a commitment. As a subscriber, you may have the option to elect to purchase a specific amount of kilowatt-hours (kWh) per month or year from the project. You may also have the option to commit to consuming a certain percentage of your total energy usage from the solar project. The developer will dictate how many kWhs of credit to apply to the various membership meter accounts based on the arrangement. Subscribing meters where the utility credits are applied must typically reside within the same utility load-zone as the solar project itself. As community solar grows in popularity, best practices will be aggregated and more standardization will appear from one market to the next. For now though, each state is testing their own models to see what works best for delivering clean energy to broader audiences and disadvantaged segments, while embodying the four guiding principles behind shared renewables: • Expand renewable energy access to a broader group of energy consumers
www.BorregoSolar.com [email protected] 888-898-6273 888-898-6273
• Produce tangible economic benefits on customers’ utility bills • Remain flexible enough to account for energy consumers’ preferences • Be additive to and supportive of existing renewable energy programs and do not undermine them
What’s Next? Well-designed community solar programs give more Americans the ability to participate directly in the country’s clean energy economy, which will expedite the transition to a more sustainable, clean, reliable, and independent energy future. If you’re a property owner with a site you’d like considered for hosting a community solar project, contact an experienced solar company actively developing projects in your area.
Renewables program is expanding access to solar by extending NY’s net energy metering (NEM) policy to include centrally-located solar arrays up to 2 MW. For full rules on who can be an organizing sponsor, system size limitations, and potential subscribers check out Vote Solar’s New York PSC Shared Renewable Order Summary. • Massachusetts: The state passed its law enabling community renewable energy projects back in 2008 as part of the Green Communities Act and had the first project operating by 2012. Read about the Gardner Mill Street community solar project Borrego Solar built for Boston Community Capital in Massachusetts here.
If you’ve looked into solar previously and for any reason couldn’t proceed, now is the time to reach out to an organizing sponsor in your area and see if there’s a project for you to subscribe to.
Market Specific Programs • California: The California Public Utilities Commission is working to implement Senate Bill 43, which seeks to create the Green Tariff Shared Renewables (GTSR) program. The program provides utility customers with two ways of going solar: the first is an option for utility customers to have 50% or 100% of their power come from renewable energy agreements signed on their behalf by the utility, and the second option for customers is to support a specific solar project located nearby and developed by a third-party but procured by the utility. The program design is still being finalized. • New York: NY Gov. Andrew Cuomo put forth the landmark New York Reforming the Energy Vision (REV) process, which is overseen by the state’s Public Service Commission (PSC). Along with the REV process and the ongoing NY-Sun Initiative, the NY Shared www.BorregoSolar.com
For more information on shared renewables, visit Shared Renewables HQ, created by the advocacy organization Vote Solar.
www.BorregoSolar.com [email protected] 888-898-6273 888-898-6273
New York, Massachusetts, Colorado, Minnesota and California are leading the pack in implementing innovative programs and policies that expand access to solar electricity for those that can’t afford it on their own or who own properties that aren’t ideal for solar. These programs, referred to as community solar or shared solar, reduce energy costs for low- and moderate- income ratepayers and small businesses, and in some cases help utilities meet renewable portfolio standards (RPS). Support for shared solar goes all the way up to the federal level. The White House recently annouced the National Community Solar Partnership to increase access to solar for all Americans, specifically low- and moderate- income communities. With the cost of solar photovoltaics at historic lows and the continued growth of the solar industry, programs like community solar that expand the market for renewables will have a significant positive impact on the nation’s economy and progress toward energy independence.
Why Community Solar? “The traditional panels-on-your-roof approach simply doesn’t work for a majority,” said Sean Garren, northeast
www.BorregoSolar.com
regional manager for Vote Solar, a national solar advocacy organization. “Families who rent, who have low credit scores, or who lack significant savings face real barriers, yet those same families have the most to gain from the utility bill savings of affordable solar power.” Historically, solar energy has only been available to businesses and homeowners with either enough capital to afford the technology, or good enough credit to utilize a variety of financing options available, such as leases, power purchase agreements and loans. Another barrier for many customers is the physical characteristics of their property, such as having too much shading from trees or nearby buildings, limited square footage, or unfit roof structures. Think of all the tall apartment buildings in metro areas that have a relatively small footprint compared to their energy load. Those same rooftops can be old and need replacing or even require structural retrofits in order to handle the weight (load) of the solar panels, racking, and inverters. Those same roofs typically house skylights and or HVAC equipment that can limit the usable square footage for solar too or make the design cost prohibitive.
[email protected] 888-898-6273
Property ownership can be a hurdle to overcome as well. Tenants of commercial properties may have an interest in going solar, but becasue they don’t own the property they usually don’t have a say in whether or not a solar project is built. The affordable housing sector has embraced solar for years, but the energy generated typically only offsets the load from common areas (e.g. laundry facilities, lighting in parking areas and hallways, security cameras) and isn’t applied to the tenant’s energy consumption. By only reducing non-tenant related energy demand property owners and management companies are seeing all of the energy cost swings. However, in rare cases those savings do trickle down to the tenants, but when they do, the amount of those savings are negligible. With community solar programs in place, tenants in multi-unit housing complexes, small businesses with varying levels of credit, and property owners with aging facilities or shading constraints, can circumvent the typical roadblocks and opt-in to purchasing solar from a shared renewable energy project.
How Does it Work? In different markets they call it different things: community distributed generation, shared renewables, community solar, and community net metering to name a few. Regardless of what you call it, these programs offer customers the option to buy power from a solar project built at a remote site and financed by some other entity. Customers, referred to in this context as subscribers, can choose to opt-in or out when they want, so they don’t have to make energy purchasing decisions today that will have ramifications in 20 years. Subscribers will receive utility bill credits for their portion of the energy produced by the system. They don’t have to own the property where the solar project is hosted. They don’t necessarily need investment grade credit to secure the funds to finance these deals either. They just have to raise their hand and say “I want to use clean power from the sun!”
www.BorregoSolar.com
What Actually Happens? First, a solar developer identifies a property that is ideal for solar. Typically the larger the property the better to take advantage of economies of scale and provide more power to participating subscribers. Once the site is identified, the developer and property owner negotiate a lease agreement, by which the property owner receives lease payments, and in return, will allow the solar developer to construct the solar project on their property (roof, land, parking lot, etc.) where it will operate for the term of the lease (typically 20 years). This is similar to a standard landlord and tenant lease agreement, only the tenant is a renewable generating asset. While the solar project is being designed, engineered, permitted and constructed, the developer will market the proposed project to potential subscribers, in either the private or public sectors nearby, to secure a commitment. As a subscriber, you may have the option to elect to purchase a specific amount of kilowatt-hours (kWh) per month or year from the project. You may also have the option to commit to consuming a certain percentage of your total energy usage from the solar project. The developer will dictate how many kWhs of credit to apply to the various membership meter accounts based on the arrangement. Subscribing meters where the utility credits are applied must typically reside within the same utility load-zone as the solar project itself. As community solar grows in popularity, best practices will be aggregated and more standardization will appear from one market to the next. For now though, each state is testing their own models to see what works best for delivering clean energy to broader audiences and disadvantaged segments, while embodying the four guiding principles behind shared renewables: • Expand renewable energy access to a broader group of energy consumers
www.BorregoSolar.com [email protected] 888-898-6273 888-898-6273
• Produce tangible economic benefits on customers’ utility bills • Remain flexible enough to account for energy consumers’ preferences • Be additive to and supportive of existing renewable energy programs and do not undermine them
What’s Next? Well-designed community solar programs give more Americans the ability to participate directly in the country’s clean energy economy, which will expedite the transition to a more sustainable, clean, reliable, and independent energy future. If you’re a property owner with a site you’d like considered for hosting a community solar project, contact an experienced solar company actively developing projects in your area.
Renewables program is expanding access to solar by extending NY’s net energy metering (NEM) policy to include centrally-located solar arrays up to 2 MW. For full rules on who can be an organizing sponsor, system size limitations, and potential subscribers check out Vote Solar’s New York PSC Shared Renewable Order Summary. • Massachusetts: The state passed its law enabling community renewable energy projects back in 2008 as part of the Green Communities Act and had the first project operating by 2012. Read about the Gardner Mill Street community solar project Borrego Solar built for Boston Community Capital in Massachusetts here.
If you’ve looked into solar previously and for any reason couldn’t proceed, now is the time to reach out to an organizing sponsor in your area and see if there’s a project for you to subscribe to.
Market Specific Programs • California: The California Public Utilities Commission is working to implement Senate Bill 43, which seeks to create the Green Tariff Shared Renewables (GTSR) program. The program provides utility customers with two ways of going solar: the first is an option for utility customers to have 50% or 100% of their power come from renewable energy agreements signed on their behalf by the utility, and the second option for customers is to support a specific solar project located nearby and developed by a third-party but procured by the utility. The program design is still being finalized. • New York: NY Gov. Andrew Cuomo put forth the landmark New York Reforming the Energy Vision (REV) process, which is overseen by the state’s Public Service Commission (PSC). Along with the REV process and the ongoing NY-Sun Initiative, the NY Shared www.BorregoSolar.com
For more information on shared renewables, visit Shared Renewables HQ, created by the advocacy organization Vote Solar.
www.BorregoSolar.com [email protected] 888-898-6273 888-898-6273
