Five Figures to Consider
Nine in ten Americans favor expanding solar power, according to Pew Research. But only half of American consumers live in homes that can accommodate solar panels. You rent? Sorry. You live in an apartment? Good luck. Your home is on the north side of a mountain or in a shady dell? Don’t bother calling a solar installer. Even if you live in a perfectly sited home for solar, you may not want an array of panels on your roof. In all of these cases, community solar may be your answer. You can become a clean energy producer and lower your electricity bill at the same time.
One home converting to solar is the carbon equivalent of taking one car off the road. That’s appealing to consumers, businesses, utilities and governments concerned about climate change. While the solar power market has tripled in size since 2010, it still comprises just 1.3% of U.S. electricity generation. That compares with 63% for carbon producing fossil fuels. Since electricity generation is the source of 34% of energy-related carbon emissions in the U.S., incorporating more green energy into the grid is a priority for states that have set carbon reduction goals. California, after reaching its 2020 climate goal early in 2018, is now aiming for 100% carbon-free electricity by 2045. So is Hawaii. New York is targeting a 40% reduction in greenhouse gases by 2030, while New Jersey has set a goal of 50% renewable electricity by 2030. Connecticut’s goal is a 45% reduction in greenhouse gas emissions by 2030. All of these states are turning to community solar to help them meet their targets.
Currently 42 states have at least one community solar project, and 19 states have established policies and programs to encourage community solar development. Going even further, Illinois, New York and Maryland have set community solar mandates. According to the Smart Electric Power Alliance, community solar capacity doubled in 2017. By 2021, it is expected to grow by an additional 50%, albeit off of a small base. Community solar represents just 1% of current solar capacity. Still, new community solar projects are expected to bring online enough energy to power almost half a million homes within the next three years.
There are a variety of community solar program models. About one-third are administered by utilities, the rest by third parties, mostly for-profit. Some programs are ownership based. In fact, you can take your panels with you when you move. Others are like a lease with a set term, say 10 or 20 years. Subscriptions are usually limited to residential and commercial customers in the area in which the community solar farm is located. (Picture row upon row of solar panels sited on a building rooftop, a former landfill or an abandoned commercial site.) Often, local governments require an allotment of subscriptions for low- to moderate-income utility customers. The most popular projects require no money down and promise a small, say 10%, reduction in a subscriber’s electricity bill. The farms are professionally managed and maintained. You log into a customer portal that enables you to monitor the output of your panels, which are sized to match your annual electricity use. Your panels’ energy output goes to your utility’s grid. The utility pays you for your share of the solar production with credits on your electricity bill. How much will you get paid? Read your contract carefully. You want an agreement that protects your bill credits from changes in net metering (the way utilities compensate customers for the solar power they produce) and fluctuations in energy prices. You should also understand who will benefit from the solar federal income tax credit, the administrator or you? The credit is currently 30%. Sometimes it is divided among subscribers; sometimes it is not. Make sure you also understand any program cancellation fees.
Want to find out if there is a community solar project open for enrollment near you? Ask your local electricity provider, search the EnergySage community solar project database and plug your zip code into the websites of community solar developers. (None of these search methods is flawless, so try all three.) This editor found success when she entered her Connecticut zip code into the search engine on the website of Clean Energy Collective (CEC), one of the country’s largest community solar developers. As part of a Connecticut community solar pilot project, CEC is building a community solar farm on property owned by the Bloomfield Board of Education, which in turn will receive savings on its electricity costs. The Bloomfield, CT, Community Solar Program, which is open to local Eversource utility customers, is set-up like a lease with a 20-year term. Once the solar farm starts providing power to Eversource, subscribers will receive bill credits calculated at a fixed-rate per KwH on their electricity bill. The monthly net savings for this editor after subtracting payments to CEC would be $48. Inflation will eat away at that fixed savings over time, but in the meantime this editor’s solar panels would supply the grid with clean energy equivalent to her home’s annual usage. Today community solar projects are enrolling participants in Connecticut, New York, Massachusetts, Minnesota and other states. Estimated electricity bill savings range from 4% to 12%.
In spite of the new 30% tariffs on imported solar cells and modules, U.S. solar capacity, which is less than that of China, Japan and Germany, continues to climb. In the first half of 2018, solar accounted for 29% of new electricity generating capacity brought online. Although solar equipment, energy and installation prices are impacted by externalities like tax breaks, tariffs, changing net metering policies and impermanent government incentives, it is still possible for consumers to achieve reasonably predictable returns through a well-chosen community solar program.
FIVE FIGURE THINKING
Joining a community solar program is like buying your own carbon offset. You help your state reduce carbon emissions, increase local solar industry jobs and save a little on your electricity bill. And you don’t need a solar roof to do it.
California Air Resources Board, Center for Climate and Energy Solutions, Clean Energy Collective, Connecticut Department of Energy and Environmental Protection, Connecticut Fund for the Environment, Energy Sage, Environmental Defense Fund, Environmental Protection Agency, GTM Research, International Energy Agency, National Coalition of State Legislatures, National Regulatory Research Institute, National Renewable Energy Laboratory, New York Governor Mario Cuomo, Pew Research, SharedRenewables.org, Solar Energy Industries Association, U.S. Department of Energy, U.S. Energy Information Association