Residential solar installations are fairly expensive propositions, making it more difficult for people to participate in this renewable energy resource. But now, a relatively new concept—community solar—is seeing the light of day. Despite some financial, legal and technology barriers, a handful of utilities in cities like St. George, UT, and Seattle, WA, have come together for community solar, paving the way for more to follow. Private industry is also stepping in, helping the market to heat up more quickly.
by Debbie Van Der Hyde, Green Economy Post
What is community solar?
Northwest Community Energy defines community solar as a ‘solar-electric system that, through a voluntary program, provides power and/or financial benefit to, or is owned by, multiple community members.’ The concept is similar to that of a community garden, or p-patch, where a plot of city land is available for gardeners who do not have appropriate space in their own residences, perhaps because they are apartment dwellers.
As a renewable energy resource, solar is the most accessible option. “However, in many cities, less than 50 percent of homes are suitable for solar power,” says Linda Irvine of NW Sustainable Energy for Economic Development. “The residences are either in the shade too much of the time or not occupied by owners,” Irvine says.
Community solar allows people to invest what they are able to afford in a photovoltaic (PV) installation that is installed on a publically-owned location. This could be a government building, municipal library or public educational facility.
Irvine adds that there are two “flavors” of community solar. The first option, which is already happening in some regions, is when a utility erects a solar installation on behalf of customers, who can voluntarily participate in the program. (Follow this link for a case study of Sacramento Municipal Utility District’s (SMUD) SolarShares program).
The second still hypothetical option is when a group of interested people form a company or LLC and find a willing host with a solar-friendly building or property. The LLC would come up with the capital to purchase and install PV panels, and install net metering to offset electricity bills for the building or host. Individuals participating in the LLC would potentially receive a share of production credits proportional to their share of ownership of the panels.
Removing the blocks to community solar
More and more utilities and policy makers are warming up to the idea of community solar, thanks to a few trailblazers like SMUD and others. Currently, utilities are being challenged to transition from the traditional one-way role of selling electricity to the consumer to the two-way (or sometimes multi-directional) role of also buying electricity from the consumer. In the case of solar, this requires the utility to offer residential net metering for private solar installations. Many utilities are still figuring out how to credit customers for the energy they produce.
One working model for community solar comes from Utah’s SunSmart program. The program is a collaboration of the City of St. George Energy Services Department and Dixie Escalante Electric. According to a release, the utilities are planning to install up to 20 PV projects at 100 kW each. St. George Energy and Dixie provided the capital for the initial installation and sold shares to city residents to fund the next installation. Participating customers qualified for the state’s renewable energy systems tax credit and also receive monthly kilowatt-hour credits on their utility bills based on the amount of energy produced by the system.
New policy incentives shine through
NW SEED states there is no one-size-fits-all business model for community solar across the nation. The financial incentives vary considerably by state, as well as the appropriate legal structure and technology decisions for the community. “It depends on the community resources and requirements,” Irvine says.
Washington State is one of the most progressive in this area with its new community solar law. In 2009, the state passed the Washington State Department of Revenue’s Renewable Energy Production Incentive Program, which provides incentives on a per kilowatt basis for investors to install solar-electric systems on public buildings and private homes. The incentives increase if the components of the system are made in Washington. (For a full listing of solar incentives by state, see the Database for State Incentives for Renewables & Efficiency web site.)
In sync with these recent developments, Seattle, one of 25 cities across the nation to be named as a Solar America City, is moving ahead with a community solar program to ‘increase residential, commercial, city-owned and community-scale solar energy use.’
According to a Seattle City Light proposal to the Department of Energy describing the program, ‘Seattle will sell shares of a larger solar electric installation to participants who might otherwise not have access to solar and who will benefit from a well-sited, professionally maintained system.
The report states that: ‘Seattle City Light believes it can create a program that addresses legal, technical and logistical hurdles in a format that is easy for other cities to implement. The utility plans to share its experiences in developing the program with all Solar America Cities and other communities interested in developing similar programs.’
Private industry makes a move
In the meantime, private industry is stepping in and partnering with public institutions on community solar installations. One such company is Silicon Energy in Arlington, Washington. Silicon Energy has partnered with Shoreline Community College to install what is expected to become the largest community solar-electric array in the nation.
According to a press release, the college will lease the rooftop of the student union building to Silicon Energy. The company will then install the system and seek the investors. The college anticipates a significant savings on electricity, as well as the opportunity to provide a hands-on solar technology experience to students.
Photo courtesy of William Picard
© 2010, Debbie Van Der Hyde. All rights reserved. Do not republish.