Will community solar be the next rooftop solar?

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In March, I attended a Department of Energy workshop for the National Community Solar Partnership. Community solar, also known as shared solar, typically involves individuals subscribing to a portion of the energy output of a large community-located solar array (100 kW to 5 MW) as opposed to a smaller array on their home roof. Many individuals can sign up for one project, and since the projects are larger, they should be cheaper to build. According to a Rocky Mountain Institute report, the community solar market offers up to a 30 gigawatt market potential if the business and project development models can be scaled quickly.

Green power has traditionally been a product that consumers have paid a premium for above their basic utility rates. With the emergence of rooftop solar and now community solar – and in step with those sector’s available subsidies – consumers are now purchasing green power at a discount to utility rates. While community solar seeks to give increasing access to consumers who cannot purchase rooftop solar products for technical or financial reasons, questions have arisen regarding the additionality of community solar programs and the equity of how these programs are funded. Regardless of these questions, the sector is growing rapidly as communities and business alike push the development of the sector in a direction that will continue to have discount solar product offerings.

With a view towards the likely possibility of unsubsidized distributed solar being available in the near future as a more ubiquitous discount product, utilities are beginning to make their own program offerings in the community solar sector, eager to compete with third-party offerings yet cognizant of the issues around equity and additionality. At the same time, many states are crafting legislation for community solar, and this legislation has been found to have significant effects on how the sector develops state by state.

In California, legislation to promote community solar passed in 2013, but the programs following that legislation are only coming into place this year. The target is to build 600 MW of community shared renewables across California by 2019. In the original legislation, additionality and equity goals were emphasized. The renewable energy credits generated by the project should be retired, to ensure that project builds renewable energy above and beyond the existing renewable portfolio standard. On the equity end, non-participant protection in the legislation was mandated ensuring that ratepayers who did not choose to participate in shared renewables did not end up subsidizing those who did participate (an argument often made in the case of rooftop solar).

But developers are not showing up to build community solar projects. The rate structures decided on by the CPUC do not create avenues for third-party companies (like Clean Energy Collective or Solar City) to make discount solar offerings to customers, as with normal rooftop solar. This is because there are additional fees to protect non-participants, the RECs are not monetized, and there is no net metering as with rooftop solar. So while net metering for individual rooftops has just been continued until 2019 (a victory for the solar industry), it is unclear whether developers will be coming to build the 600 MW of community solar that the community solar legislation has targeted. Larger community solar projects could be properly sited to minimize distribution grid impacts, and they could be built at a lower cost than small rooftop projects on a $/W basis. But no one is coming to build them.

Why do you think rooftop solar got such a great deal in California but not community solar? Discuss in the comments below!