Community SolarA community solar farm or garden is a solar power installation that accepts capital from and provides output credit and tax benefits to individuals and other investors.
What is a Solar Farm/Garden?
A community or municipal solar farm or garden is a centralized installation that allows community members to use or purchase solar energy without installing individual systems at their residence or business. In some cases you buy individual solar panels and in some cases you buy shares or blocks of kWhs.
Initial market research shows that consumers are interested in community solar, but are looking for programs with flexible commitments such as short-term contracts and transferability.
“Utilities increasingly see community solar as a low-risk way to gain experience in integrating solar onto the grid while meeting customer demand for clean energy;’ said John Sterling, SEPA’s Senior Director of Advisory Services.
Potentially meets policy requirements at lower costs
A community solar program may be a way to help meet Renewable Portfolio Standard (RPS) goals or requirements at lower costs relative to customer-sited systems.
Improved customer equity
Community solar can potentially address the issue of subsidization of distributed solar customers by non-participants, under circumstances where there remains an imbalance in credits and charges to customers with distributed solar. A program can be designed so that participating customers support the full cost of the program and non-participating customers are held neutral.
Potential distribution system benefits
If strategically located, community solar arrays could provide distribution system benefits.
Effects of Community Solar Programs
Support of regional solar PV industries insures economic development for the entire community through supply chain and construction activities.
Lower and more equitable incentive requirements
Larger-scale community solar systems are more cost effective than an individual system. The result may improve the ability of rate payers to deploy more solar for a lower total investment.
A broader pool of customers can participate in solar
Community solar programs allow their customers to overcome both physical and financial barriers of installing solar on their property; including rental properties, properties limited by shading, customers with lower credit scores or lower incomes and properties with unsuitable roof orientation or design.
Customer satisfaction and engagement
A community solar program can get customers more positively engaged with the utility and thereby, enhance customer relationships and their solar experience. Additionally, it can enable choices in their electricity sources with similar benefits to third-party or customer-owned systems.
Provide other customer services
Utilities are energy organizations not tethered solely to solar and are able to bundle community solar with other services such as demand response and energy efficiency.
As of the end of August 2015, SEPA was tracking 68 community solar projects in operation across the country, and 13 states and the District of Columbia have enacted legislation to promote community solar development. About 80 percent of these projects are under 1 megawatt (MW).
About 73 percent of the organizations responding to SEPA’s community solar survey charge subscribers an upfront fee to buy into a project; but as solar costs have dropped, so have upfront fees, from $5 per Watt in 2011 to $3 per watt in 2015.