Community solar

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Community solar farm in the town of Wheatland, Wisconsin Solar farm in Wisconsin 01.jpg
Community solar farm in the town of Wheatland, Wisconsin

A community solar project, farm or garden is a solar power installation that accepts capital from and provides output credit and tax benefits to multiple customers, including individuals, businesses, nonprofits, and other investors. Participants typically invest in or subscribe to a certain kW capacity or kWh generation of remote electrical production. [2] The project's power output is credited to investors or subscribers in proportion to their investment, with adjustments to reflect ongoing changes in capacity, technology, costs and electricity rates. Community solar provides direct access to the renewable energy to customers who cannot install it themselves. [2] Companies, cooperatives, governments or non-profits operate the systems. [3]

Contents

As of 2021, there are 39 U.S. states with at least one community solar project. [4]

Benefits of community solar

Installing solar panels on a building or household can come with a variety of issues. [5] For homeowners, these limitations include roof shape/size constraints, shading, grid capacity, and zoning regulations. Non-homeowners cannot make building modifications like solar installations. Additionally, low-income households in the U.S. face an energy burden (a term used by the U.S. Department of Energy to define how much of a household's gross income is spent on paying for energy) that is roughly triple the amount of other U.S. households. [6] With around 50 million low-income U.S. households (about 44% of the U.S. household total), many U.S. residents are spending large amounts of their income on energy. [6] Many of these residents, whether they are renters or their properties don't support installation, don't have access to solar. [5]

Community solar functions similarly to conventional grid-supply energy insofar as it provides energy remotely, requiring no installation or maintenance on the part of the consumer. [5] Because of community solar projects' remote nature, the physical limitations of solar installation for consumers disappear. Also, due to its subscription/opt-in functionality, community solar can increase access to solar energy for low-income households. These projects benefit initial investors too. As consumer rates for solar energy become lower through distributed generation of community solar, initial investors in community solar projects experience higher returns in the long run. [5]

Centralizing the location of solar systems can thereby create advantages over residential installations: [5]

There are also a number of social/community benefits of community solar: [5]

Community solar in the United States

An estimated 80% of U.S. residents can neither own nor lease systems because their roofs are physically unsuitable for solar or because they live in rented or multi-family housing and do not have control over their roof. [12] As of April 2023, 40 states and Washington D.C. encourage their development through policy and programs. [13]

The City of Ellensburg, Washington, and its municipal electric utility claim to have installed the first community solar system in 2006. [14]

Federal and other tax policies are necessary to finance community solar farms. U.S. Senator Mark Udall introduced the SUN Act (Solar Uniting Neighborhoods) to extend the existing 30% tax credit to community solar farms in 2010 and 2011. [15] [16] [17] The bill would have enabled groups of individuals or homeowner associations to develop utility-scale solar power facilities in collaboration with local utilities that would distribute the power and credit owners based on their percentage of investment in the solar farm, extending the tax credits accordingly. [16]

Many states have adopted virtual net metering (VNM) policies, which let businesses or households that subscribe to an offsite community solar project receive the net metering credits from that remote project. [18] [19]

Community solar subscribers can only claim to use renewable energy if they receive the renewable energy certificates (RECs) associated with the electricity they are using. [20] Often, RECs are split from the electricity that community solar projects create and sold to utilities in order to help them comply with renewable portfolio standards implemented by states. [21]

Federal Policies and Programs

The solar Investment Tax Credit (ITC), implemented in 2006, is a one-time tax credit for commercial solar developers, including those who develop community solar projects. [22] While the solar ITC rate was scheduled to gradually decrease over time, Congress passed a two year extension of the 26% rate in 2020 alongside a COVID relief package, [23] and the Inflation Reduction Act of 2022 restored its original 30% rate.

The Solar Energy Technologies Office (SETO) in the U.S. Department of Energy has sponsored various community solar related projects and research efforts. [24] One such program is the National Community Solar Partnership, a partnership of various community solar stakeholders with the aim of increasing accessibility and affordability of community solar programs in the U.S. [25]

California

SolarShares [26] (2007) offers customers of the Sacramento Municipal Utility District the opportunity to buy shares in its solar farm. The electricity generated by each customer’s“shares appears as a credit on his or her energy bill, a savings expected to average between $4–$50 a month, given sunshine variability. For a monthly fee—starting at $10.75 a month (averaging 9%) for a 0.5 kW system—participants opt into solar power production. The current phase is sold out, although plans are in progress to expand capacity. [27]

The PVUSA array in Davis, California (2001) provides virtual net metering for city-owned meters. The California legislature passed a law specifically allowing this for this individual array. Senate Bill 43 was signed by Governor Brown on September 28, 2013 [28] [29]

Colorado

Colorado legislation passed in 2010 that requires the Public Utilities Commission to rewrite rules to direct investor-owned utilities to offer rebates for community solar gardens. [16]

HB10-1342, the Community Solar Gardens Act specified: [30]

In Colorado, Xcel Energy customers continue to pay the standard non-energy fees, but can buy enough solar shares to offset 120 percent of their load. [31]

Florida

Orlando Utilities Commission (OUC) has a solar farm that began producing power in October 2013. The municipal utility, which has approximately 55 percent of its 230,000 electric customers living in multi-family housing, sought a unique solution for those wanting to use solar power, but unable to modify the homes they rent or lease. This project also allows those customers the ability to buy into solar without all of the upfront costs. Subscribing customers volunteered to pay a higher rate on their power bill, but they were also able to lock in that rate for the estimated life of the project – 25 years. Today, 1,312 solar panels are generating up to 400 kilowatts (kW) of electricity at OUC's Gardenia Operations facility next to Interstate 4. The panels are on three canopies, which have created 151 covered LED-lit parking spaces over about 2.5 acres. A total of 39 customers have subscribed to the project. Each kW of the array’s 400 kW was sold in blocks, with a limit of 15 blocks per customer. Each block represents 112 kilowatt hours (kWh) on a customer's monthly bill, so the maximum benefit per customer is 1,680 kWh. The average OUC residential customer uses around 1,200 kWh. Any unused power is credited on the account for the next month. [32]

Maryland

Maryland established a community energy pilot program in 2017. [33] The purpose of this program is to invest in Maryland’s solar industry, diversify the energy resources of the state, and provide renewable energy for all state residents, particularly those who qualify as low-to-moderate income. [34] Several utility companies, including BGE, Potomac Electric Power Company (Pepco), Delmarva Power & Light, and Potomac Edison Company (MD) have been working alongside subscriber organizations, including Neighborhood Sun, to provide customers with a subscription to existing solar projects. [34]

There are several existing solar farms across Maryland, including the Panorama Landfill project. It is the largest in the US and the first residential solar farm in Maryland. Located in Fort Washington, Maryland on a former landfill, Panorama covers 25 acres of land and contains 19,000 panels. [35]

Pollinator Sites are gaining popularity at Community Solar Farms across the country. Nexamp Community Solar Farm featured in Lunenburg Massachusetts Lunenburg ma Community Solar Farm.png
Pollinator Sites are gaining popularity at Community Solar Farms across the country. Nexamp Community Solar Farm featured in Lunenburg Massachusetts

Massachusetts

The Green Communities Act of 2008 authorized what was formally known as "neighborhood net-metering", which allowed a group of residents in a neighborhood/town to pool resources to cover the capital cost of a renewable energy installation. [36]

Residents of Brewster founded the first cooperatively run solar garden in Massachusetts. The solar garden was built by solar installer My Generation Energy Inc. Each member of the cooperative was to receive benefits from the co-op; including the net-metering credits from the solar garden through Nstar. [36] Known as the Brewster Community Solar Garden, [37] [38] it is a 345.6 kW community solar farm located on Cape Cod.

Massachusetts and the Federal government each offered incentives to improve solar economics. A traditional investment in photovoltaics without incentives would take 12 or more years to pay back the initial cost. The incentives lowered the payback period to 6–10 years. [36]

Gardens built by developer Clean Energy Collective started producing power in Newton, Massachusetts in July 2014. The company originally partnered with now-defunct energy efficiency firm Next Step Living [31] and is currently working with the startup Solstice Initiative.[ citation needed ]

The largest community solar-plus-storage farm in the state in Winchendon, Massachusetts was completed in March, 2018 by CleanChoice Energy and Borrego Solar. [39]

In 2018, Massachusetts implemented the Solar Massachusetts Renewable Target (SMART) program as a replacement for the state’s former Solar Renewable Energy Credit (SREC II) program. [40] Under the SMART program, Massachusetts pays solar energy system owners at a fixed rate per kilowatt hour as an incentive. [40] This program was updated in 2020, and updates included an expansion of the definition of Low Income Customers and expanded consumer protection standards. [41]

Nexamp Community Solar Farm - Electric Ave in Lunenburg Massachusetts Nexamp Lunenberg Solar Electric Ave.png
Nexamp Community Solar Farm - Electric Ave in Lunenburg Massachusetts

Minnesota

In 2013, the Minnesota State Legislature passed a new law requiring Xcel Energy, the largest electric utility in the state, to begin a community solar pilot program. [42] Other utility companies in the state do not have the same requirement, but some are voluntarily developing community solar programs. [43] Xcel Energy still operates a community solar program in Minnesota, and the utility company oversees the Solar*Rewards program, the largest community solar program in the country. [44] [45] Most of its participants are not individual households, but rather large-scale clients like businesses. [44]

In 2019, the Interstate Renewable Energy Council gave Minnesota an A grade for shared renewables programs, a category which includes community solar. [46] As of June 2020, Minnesota had the largest community solar market of any U.S. state in terms of megawatts alternating-current installed capacity. [47] In January 2021, there were 784 megawatts of community solar operational capacity in Minnesota. [48]

New Jersey

The New Jersey Board of Public Utilities began a community solar pilot program in 2019. In the first two years of the program, 150 projects with 225 MW capacity were approved for development and incentives. All projects are required to reserve 51% of capacity for low- to moderate-income subscribers. [49]

New York

New York City is home to some of the first urban community solar farms in the country allowing renters to go solar. [50] Rooftop community solar enables solar to become economically feasible for building owners. [51]

Nexamp Community Solar Farm in Pendleton, Lockport, NY Nexamp Pendleton Solar in Lockport, NY.png
Nexamp Community Solar Farm in Pendleton, Lockport, NY

Utah

Electric utilities in St. George built a large photovoltaic facility to exploit 310 days a year with sunlight, and allowed residents to purchase it to supplement conventional energy. The program required no set-up or maintenance for the participant.

Participation is sold in whole and half units of 1 kilowatt. A 1 kW unit on the SunSmart grid cost $6,000. One unit equals approximately 15% of the average home’s monthly power (or about 140 kWh). A one-time tax credit of 25% of the purchase price, up to a maximum of $2,000, was available from the state of Utah. Purchasers received a monthly energy credit for the energy produced that month by the unit of panels. [52] [53]

Vermont

The Boardman Hill Solar Farm opened in 2015. [54]

Washington DC

Washington, D.C.’s largest solar canopy opened in April 2021 and serves 325 low-income households. It is located on a parking structure at Children’s National Research & Innovation Campus (RIC), on the former Walter Reed Army Medical Center campus. The capacity is 1,148 kW. [55]

Controversy with utility providers in the United States

Utility providers in the U.S. have, at times, resisted the increase of distributed solar and community solar development. [10] PV development can come in multiple forms, such as in community or individual rooftop projects. Such projects often rely on distributed generation (DG) to loop electricity from the source to the consumer. [10] DG routes power more directly to the consumer because of its ability to circumvent utility providers. Utilities can opt to invest in and incorporate community solar into their business model, though only some have. [10] Without aligning with community solar, the main concern for utility providers often stems from potential revenue losses. [56]

Most utility providers pay fixed rates proportional to the electricity they generate and subsequently distribute to consumers. Traditionally, the consumer has also paid a fixed rate in order to receive utility-generated power. With DG systems, as opposed to paying this fixed rate, consumers have been increasingly able to pay a market rate for the volume of electricity they use. [56] With consumers paying less than the traditionally-fixed rate, utility providers lose a portion of the revenue they would've received under traditional circumstances. [56] With conventional forms of energy still maintaining the lion's share of power distribution in the U.S. (about 61% as of 2020), however, losses in utility revenue are generally small. [57] [56]

Community solar in the United Kingdom

The first community solar farm in the United Kingdom is the 5 MW Westmill Solar Park, near Watchfield. [58]

See also

Related Research Articles

<span class="mw-page-title-main">Net metering</span> Type of billing of electricity generated from renewable sources

Net metering is an electricity billing mechanism that allows consumers who generate some or all of their own electricity to use that electricity anytime, instead of when it is generated. This is particularly important with renewable energy sources like wind and solar, which are non-dispatchable. Monthly net metering allows consumers to use solar power generated during the day at night, or wind from a windy day later in the month. Annual net metering rolls over a net kilowatt-hour (kWh) credit to the following month, allowing solar power that was generated in July to be used in December, or wind power from March in August.

<span class="mw-page-title-main">Renewable energy in the United States</span>

According to data from the US Energy Information Administration, renewable energy accounted for about 13.1% of total primary energy consumption and about 21.5% of total utility-scale electricity generation in the United States in 2022.

Financial incentives for photovoltaics are incentives offered to electricity consumers to install and operate solar-electric generating systems, also known as photovoltaics (PV).

<span class="mw-page-title-main">Community Choice Aggregation</span> Alternative energy supply system

Community Choice Aggregation (CCA), also known as Community Choice Energy, municipal aggregation, governmental aggregation, electricity aggregation, and community aggregation, is an alternative to the investor-owned utility energy supply system in which local entities in the United States aggregate the buying power of individual customers within a defined jurisdiction in order to secure alternative energy supply contracts. The CCA chooses the power generation source on behalf of the consumers.

<span class="mw-page-title-main">Solar power in the United States</span>

Solar power includes solar farms as well as local distributed generation, mostly on rooftops and increasingly from community solar arrays. In 2022, utility-scale solar power generated 145.6 terawatt-hours (TWh), or 3.4% of electricity in the United States. Total solar generation that year, including estimated small-scale photovoltaic generation, was 204 TWh.

<span class="mw-page-title-main">Solar power in California</span>

Solar power has been growing rapidly in the U.S. state of California because of high insolation, community support, declining solar costs, and a renewable portfolio standard which requires that 60% of California's electricity come from renewable resources by 2030, with 100% by 2045. Much of this is expected to come from solar power via photovoltaic facilities or concentrated solar power facilities.

<span class="mw-page-title-main">Solar power in New Jersey</span> Overview of solar power in the U.S. state of New Jersey

New Jersey has over 4,100 MW of install solar power capacity as of mid-2022, which provides 6.7% of the state's electricity consumption. The's state's growth of solar power is aided by a renewable portfolio standard that requires that 22.5% of New Jersey's electricity come from renewable resources by 2021 and 50% by 2030, by incentives provided for generation of solar power, and by one of the most favorable net metering standards in the country, allowing customers of any size array to use net metering, although generation may not exceed annual demand. As of 2018, New Jersey has the sixth-largest installed solar capacity of all U.S. states and the largest installed solar capacity of the Northeastern States.

<span class="mw-page-title-main">Solar power in Arizona</span> Overview of solar power in the U.S. state of Arizona

Solar power in Arizona has the potential to, according to then-Governor Janet Napolitano, make Arizona "the Persian Gulf of solar energy". In 2012, Arizona had 1,106 MW of photovoltaic (PV) solar power systems, and 6 MW of concentrated solar power (CSP), bringing the total to over 1,112 megawatts (MW) of solar power. As an example, the Solana Generating Station, a 280 MW parabolic trough solar plant, when commissioned in 2013, was the largest parabolic trough plant in the world and the first U.S. solar plant with molten salt thermal energy storage.

<span class="mw-page-title-main">Solar power in Florida</span> Overview of solar power in Florida, United States

Solar power in Florida has been increasing, as the cost of solar power systems using photovoltaics (PV) has decreased in recent years. Florida has low electricity costs compared with other states, which makes individual solar investment less attractive. Florida ranks ninth nationally in solar resource strength according to the National Renewable Energy Laboratory and tenth in solar generation by the Solar Energy Industries Association.

<span class="mw-page-title-main">Solar power in Michigan</span> Overview of solar power in the U.S. state of Michigan

Solar power in Michigan has been growing in recent years due to new technological improvements, falling solar prices and a variety of regulatory actions and financial incentives. The largest solar farm in Michigan is Assembly Solar, completed in 2022, which has 347 MW of capacity. Small-scale solar provided 50% of Michigan solar electricity as recently as 2020 but multiple solar farms in the 100 MW to 200 MW range are proposed to be completed by the middle of the decade. Although among the lowest U.S. states for solar irradiance, Michigan mostly lies farther south than Germany where solar power is heavily deployed. Michigan is expected to use 120 TWh per year in 2030. To reach a 100% solar electrical grid would require 2.4% of Michigan's land area to host 108 GW of installed capacity.

<span class="mw-page-title-main">Solar power in Ohio</span> Overview of solar power in the U.S. state of Ohio

Solar power in Ohio has been increasing, as the cost of photovoltaics has decreased. Ohio installed 10 MW of solar in 2015. Ohio adopted a net metering rule which allows any customer generating up to 25 kW to use net metering, with the kilowatt hour surplus rolled over each month, and paid by the utility once a year at the generation rate upon request. For hospitals there is no limit on size, but two meters are required, one for generation, the other for utility supplied power.

<span class="mw-page-title-main">Solar power in Indiana</span> Overview of solar power in the U.S. state of Indiana

Solar power in Indiana has been growing in recent years due to new technological improvements and a variety of regulatory actions and financial incentives, particularly a 30% federal tax credit for any size project.

<span class="mw-page-title-main">Solar power in Iowa</span> Overview of solar power in the U.S. state of Iowa

Solar power in Iowa is limited but growing, with 137 megawatts (MW) installed by the end of 2019 and 27 MW installed during that year, ranking the state 40th among U.S. states. Iowa also generated 0.23% of the state's total electricity production in 2019 from solar energy; an amount sufficient to power over 17,000 Iowa homes. The state's early position as a major wind-power provider may have limited early large-scale solar investment.

<span class="mw-page-title-main">Solar power in Maine</span> Overview of solar power in the U.S. state of Maine

Solar power in Maine on rooftops, utilizing 6,300 megawatts (MW) of solar panels, can provide 60% of the electricity used in Maine according to a 2016 U.S. Department of Energy study. Maine and Vermont are tied for the second highest rooftop solar potential in the country, only behind the state of California. A 2020 estimate suggests that a typical 5.6 kilowatt (kW) residential system will pay for itself in 6-7 years and generate a profit of $45,000 over the rest of its 25-year life from the tax credits and utility savings.

<span class="mw-page-title-main">Solar power in Alabama</span> Overview of solar power in the U.S. state of Alabama

Solar power in Alabama on rooftops could theoretically provide 29.8% of all electricity used in Alabama, with 20,400 MW of solar panels potentially installed on rooftops.

<span class="mw-page-title-main">Solar power in Georgia (U.S. state)</span> Overview of solar power in the U.S. state of Georgia

Solar power in Georgia on rooftops can provide 31% of all electricity used in Georgia.

<span class="mw-page-title-main">Solar power in Minnesota</span> Overview of solar power in the U.S. state of Minnesota

Solar power in Minnesota expanded significantly in the early 2010s as a result of the cost decrease of photovoltaics and favorable policies. By 2016, it began to grow quickly.

<span class="mw-page-title-main">Solar power in New Hampshire</span> Overview of solar power in the U.S. state of New Hampshire

Solar power in New Hampshire provides a small percentage of the state's electricity. State renewable requirements and declining prices have led to some installations. Photovoltaics on rooftops can provide 53.4% of all electricity used in New Hampshire, from 5,300 MW of solar panels, and 72% of the electricity used in Concord, New Hampshire. A 2016 estimate suggests that a typical 5 kW system costing $25,000 before credits and utility savings will pay for itself in 9 years, and generate a profit of $34,196 over the rest of its 25-year life. A loan or lease provides a net savings each year, including the first year. New Hampshire has a rebate program which pays $0.75/W for residential systems up to 5 kW, for up to 50% of the system cost, up to $3,750. However, New Hampshire's solar installation lagged behind nearby states such as Vermont and New York, which in 2013 had 10 times and 25 times more solar, respectively.

<span class="mw-page-title-main">Solar power in Virginia</span>

Solar power in Virginia on rooftops is estimated to be capable of providing 32.4% of electricity used in Virginia using 28,500 MW of solar panels. Installing solar panels provides a 6.8% return on investment in Virginia, and a 5 kW array would return a profit of $16,041 over its 25 year life.

<span class="mw-page-title-main">Solar power in Wisconsin</span> Overview of solar power in the U.S. state of Wisconsin

Solar power in Wisconsin In 2026, Wisconsin rooftops can accommodate approximately 37 GWs of solar capacity and produce 44,183 GWh of electricity, nearly 70% of the statewide generation in 2019. Net metering is available for systems up to at least 20 kW, and excess generation is credited at retail rate to customers next bill. Some utilities allow net metering up to 100 kW. For Xcel customers, kilowatt credits are rolled over monthly and are reconciled annually at avoided cost. Best practices recommend no limits, either individually or aggregate, and perpetual roll over of kilowatt credits.

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