Community solar is an innovative new investment model that can provide Americans with the many benefits of solar energy even if they cannot site a system on their own property because they are renters, have roofs that are shaded or in disrepair, or they are not able to finance a solar installation. These barriers are particularly prevalent in less affluent areas, making community solar a promising way to improve access to renewable energy in low-income neighborhoods. This Handbook is intended to help municipalities clearly define and articulate the project’s objectives and understand the financial, legal, and policy issues they would need to address to initiate community solar investments in their communities and convey the resulting benefits to their constituents. The Handbook identifies three obstacles to success — access to capital, expertise, and risk-allocation — and includes suggestions on how to overcome these obstacles, including the potential use of public funds to reduce the project’s cost and public-private partnerships. This study also includes ideas gleaned from other community solar projects that appear particularly interesting or innovative. In addition, it offers five possible deployment models municipalities could use to support, finance, or build a community solar project in their jurisdictions. There are no simple, one-size-fits-all, models for a successful community solar project. However, a municipality can be a catalyst and hub for development of the necessary expertise, and it has opportunities to help reduce project costs and risks that can open the door for successful projects.
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Community solar programs (also called “shared solar”) offer the economic and environmental benefits of solar to the 49% of Americans without traditional solar access. Such programs are experiencing rapid growth, with active projects across 26 states, up from 6 states in 2010. This market has the potential to grow more than 50-fold from the 110 megawatt (MW) capacity in early 2016 to between 5,500 MW and 11,000 MW by 2020. Previously, it was often uneconomic to develop individual solar projects of less than 2 MW in capacity (2,000 kilowatts [kW]) if they were not tied directly to or net metered with a customer site. With community solar, projects between 50kW and 2,000 kW are often viable because numerous off-site subscribers can purchase shares of a solar installation rather than hosting the installation themselves. By bringing an enormous source of new demand into the market and offering new contracting arrangements to the 51% of Americans who already have potential solar access, community solar is expected to greatly expand the market for mid-sized solar projects. One strong but sometimes overlooked source of suitable sites for community solar are those covered by the U.S. Environmental Protection Agency (EPA) RE-Powering America’s Land Initiative. The RE-Powering Initiative provides data, tools, analysis, case studies, issue briefings, and outreach resources to encourage renewable energy development on contaminated lands, landfills, and mining sites (collectively “RE-Powering sites”). Community solar can overcome financing, contract flexibility, project size, and siting challenges that largely shut out LMI homes, apartments, and small businesses from the solar market, while offering added local economic development benefits if the community solar project itself is located in LMI areas. Because RE-Powering sites are frequently located in or near LMI areas, this paper will explore not only the general potential for developing RE-Powering sites for community solar, but also where siting adjacent to LMI areas extends their benefits. This market intersection is conceptually depicted in Figure 1. Within and outside LMI areas, this paper is intended to support sustainable re-use by characterizing the potential and pointing out the challenges and opportunities of community solar development on RE-Powering sites.
As solar energy continues to become more affordable, many families are expressing interest in this local, clean power source, but are unable to install a solar system at their homes for various reasons. In fact, due to structural constraints, shading from trees, and other issues, about 75% of residential rooftop area in America is not suitable for hosting a solar system. This prevents a large segment of the population from taking advantage of solar energy. The solution to this problem is Community Solar. Community Solar (aka Shared Solar) takes place through the development of solar energy projects that provide power to multiple community members. Community Solar systems are typically sited close to the community they will serve. These programs leverage economies of scale to reduce the price of solar for individual customers. This model allows Southerners to access the benefits of solar energy even if they would be unable to install solar panels on their own homes or businesses. Community Solar can be utility-sponsored (either a utility developing its own program or working with a solar company to offer a program), or it can be third party-sponsored in states that allow for competition. By offering well-designed Community Solar projects, utilities can give their customers meaningful access to affordable, local solar power and tangible control of their energy choices. By providing families more options to lower their energy costs and take advantage of the South’s vast solar resource, Community Solar can create healthier, cleaner, and stronger communities across the region. Community Solar programs also provide benefits for utilities by increasing customer satisfaction, bolstering clean energy investment, and contributing to local economic development. Utilities can take advantage of economies of scale by choosing the optimal system size and number of participants. They can also decide which location will offer the most value to the grid. Community Solar can be a win-win by providing tangible benefits to participating customers, strengthening local communities, and delivering valuable clean energy to the grid. We encourage utilities to adopt the following best practices when developing Community Solar programs to ensure that all customers receive meaningful access to solar power through this innovative program.
The concept of energy sovereignty redefines the priorities for decision making regarding energy systems while encouraging increased reliance on renewable energy technologies like solar. Energy sovereignty involves centering the inherent right of humans and communities to make decisions about the energy systems they use, including decisions about the sources, scales, and forms of ownership that structure energy access. Current U.S energy policy does not center concerns of energy sovereignty, and in many cases may work against it. Policies to enhance energy sovereignty can accelerate electricity decarbonization while also empowering community scale decision making and offering communities control to reduce the myriad externalities associated with the fossil-fuel energy system. Energy policy designed based on the concept of energy sovereignty would prioritize community voices in energy system decision making, ensuring that communities are given an opportunity to express their right to self-determined sovereignty in energy systems transitions and energy system use. Energy sovereignty is an inherently place-based practice, and policy tools that center energy sovereignty would enhance community capacity to plan for transitions while embracing considerations of the health and wellbeing of communities, both human and non-human, now and in the future. The policy tools most effective for enhancing energy sovereignty may not yet exist, but they are essential for promoting a just energy transition that benefits all communities based on their own understanding of energy transition priorities and values.
Driven by climate change and economics, energy generation is undergoing a necessary and rapid transformation towards non-emitting renewable energy, especially solar and wind. As the world decarbonizes, the energy grid will become distributed, characterized by increased local control and decreased transmission losses. The future grid also provides extensive energy security, local employment, and local risk reduction, if coupled with battery storage. Photovoltaics (PV), the direct production of electrical energy by photovoltaic cells, stand out as a key component in the required transition for social and economic reasons: scalability, safety, rapid deployment, longevity, reliability, resilience, and minimal emissions. In the last decade, the cost of solar has decreased precipitously and reached grid parity (costing the same or less than electricity from conventional sources) for most of the world in 2015. In 2019, unsubsidized residential solar was less expensive than most rates charged by utilities, while industrial solar-plus-storage produced electricity at rates that outcompeted all other means of electricity generation. Both residential and industrial solar have a miniscule carbon footprint, as compared with fossil fuels. Since globally 64% of electricity is generated through the combustion of fossil fuels, the potential to decarbonize through solar and wind is not only enormous, but is a societal imperative. Decarbonization of electrical generation becomes even more essential considering the adoption of heat pumps, electric vehicles, and other electrification initiatives. As shown by Jacobson et al. (2019), using just wind, water, and solar, almost complete decarbonization of energy is achievable before 2050. In this period of multiple crises, the UN’s Sustainable Development Goals (SDGs) offer a framework to understand and address global issues concurrently. The framework also ensures that tackling one goal does not incidentally hinder or reverse achievement of the others. Community owned solar, especially with added storage, contributes to climate change action, pollution reduction, and energy security, while reducing the relatively high energy burden for low income households. Before addressing avenues to and challenges of community solar, it is necessary to briefly summarize the many benefits of PV, separating societal benefits from benefits to an existing electrical grid. Given the stark reality of less than 10 years remaining to achieve the SDGs (United Nations 2015), community solar provides a readily available and economically viable solution to multiple SDGs. It targets the elusive middle ground in scale between residential and industrial solar and can deliver electricity competitively and at scale without requiring massive investment in supporting infrastructure. Most importantly, community solar provides more than just affordable and clean energy by democratizing the renewable energy transition. By giving power to the people, communities can utilize community solar programs in providing decent work, reducing inequalities, and increasing local resilience – while making a positive climate impact.
Community shared solar is a new and growing model for broadening local solar markets and extending the benefits of solar energy to new customers. By expanding access to solar energy, community shared solar can be a useful tool for San Francisco and other jurisdictions that seek to expand use of distributed, local solar power. To help educate stakeholders, including other Rooftop Solar Challenge partners and other cities, this paper discusses: (1) the basics of community shared solar; (2) the benefits of community shared solar; (3) variations in design of community shared solar programs; (4) examples of community shared solar program; (5) California’s regulatory context; and (6) community shared solar’s potential to expand San Francisco’s solar market. Community shared solar could also improve San Francisco’s solar market by enabling more San Francisco residents and businesses to invest in solar energy. The majority of San Francisco residents live in multi-family buildings, rent, or both: two-thirds of residential units are in multi-family buildings and 60% of San Francisco households rent. Community shared solar would allow renters and others who cannot install solar onsite to purchase solar energy for their home or business.
The Monadnock Region Community Supported Solar project in New Hampshire is bringing together farmers, investors, and champions with a goal of helping local farms realize the potential of the renewable energy economy.
Community-supported refers to a synergistic relationship between a business and consumers. Whether it be community-supported agriculture, community-supported fishery, or community-supported solar, this business model allows consumers to have access to a good or service closer to their community, usually one that is healthier and more affordable. This model also allows the local business to have greater security in its operation and be able to spread out fixed costs, usually in the form of “shares” from the consumer.
Here’s how it works. Farmers in the Monadnock region can purchase an electricity share and become a member of the Farmer Member’s Group. Participating farms enter into an operating agreement with Community Supported Solar for Farms LLC. During the LLC phase, farmers contribute by paying for a portion of the solar array installation, and they continue to use their local utilities as usual. Upfront costs are also funded by investors, making the share payments cheaper for the farmers. Community Supported Solar for Farms LLC will work with Cheshire County Conservation District (CCCD), which serves as manager of the LLC, and investors to take ownership of the array in six years through a buyout.
After the buyout occurs, the farmers group will own the system and each share will be net metered, providing free energy to those that have a share. Net metering takes unused power from the array and sends it back to the grid for later use or for others to use. This project utilizes group net-metering, which allows multiple electric meters at different locations to be bound to one solar array. Members of group net-metering benefit from solar energy without needing a solar array on their property. Each share is equivalent to 5,000 kWh of energy. The 90-kilowatt array has been built on host-member Sun Moon Farm in Rindge, New Hampshire, which also grows and sells produce within a community-supported agriculture model.
The project will realize a host of benefits. Farmers who purchase a share support renewable energy and will benefit from stable, low-cost energy, and the project’s investors benefit from earning tax credits, renewable energy certificates (REC) funds, a state rebate, and extra income on electricity sales to farmers.
CCCD and the Monadnock Sustainability Hub serve as community champions for the project. The CCCD has secured a grant through the New Hampshire Charitable Foundation that will be used, in part, for system buyout in Year 6. CCCD will host a crowdfunding initiative in February 2022 to raise additional funds to lower share costs even more for farmers.
Learn more about the Monadnock Region’s efforts at https://cheshireconservation.org/solar as well as their crowdfunding initiative at https://monadnock.thelocalcrowd.coop/campaign/community-supported-solar-for-farms/.