In its simplest form, community solar is a way to expand access to solar.
Currently, renters have very little access to solar and many buildings have structural issues to prevent adding rooftop solar. Even solar enthusiasts who have homes that could support solar systems might not have the financial ability to go ahead with a personal solar project. This is where community solar comes in.
A community solar project allows multiple energy customers to share the benefits of one local solar plant while often placing the apparatus on public or jointly owned land. This removes the previous barriers to solar while distributing costs and allowing the system to be placed more optimally.
Why Community Solar?
The National Renewable Energy Laboratory recently released a report increasing previous estimates of rooftop solar. However, even with this increase, they found that only 26% of the total rooftop area on small buildings (anything less than 5,000 ft2) is suitable for PV solar. And according to the National Multifamily Housing Council, 35% of US residents are renters further reducing their ability to reap the environmental and cost benefits of solar.
Robert Margolis, NREL senior energy analyst and co-author of the rooftop-solar report, “It is important to note that this report only estimates the potential from existing, suitable rooftops, and does not consider the immense potential of ground-mounted PV.” As community solar projects do not need to be tied to rooftops, they can be more efficiently located and generate far more clean energy.
Toba Pearlman, Regulatory Counsel and Director of Policy & Electricity Markets at SolarCity, likened community solar to ride-sharing. She pointed out that for some people owning a car is not feasible for financial or geographic reasons. Ride-sharing services like Zipcar, allow those folks to still have access to the benefits of owning a car, without the downsides such as a high upfront cost and ongoing maintenance. Community solar projects do the same thing for solar power. They can increase access to solar energy alternatives and help individuals control their energy costs.
How Does Community Solar Work?
Community solar projects come in many forms, including the utility-sponsored model, third party owned model, or the special purpose entity model. In the first model, the local utility often owns the PV solar system and ratepayers can voluntarily pay into the program. The participants will then get a payment or credit on their electric bills that is proportional to both their contribution and how much electricity the solar project generates. In the second, companies build, own, and operate the PV solar system and sell shares to commercial and residential customers. In the special purpose entity model, individuals invest together in a solar project, collectively owning the system and the electricity that it generates for the lifetime of the panels.
For these models, significant policy and financial hurdles currently prevent wide adoption. Decisions need to be made in who receives the benefits of the many tax incentives, who controls the renewable energy credits (RECs), and how exactly utilities reimburse the ratepayers on their electricity bills. Fights over rooftop net-metering have made headlines and adding in multiple customers only complicates the issue further.
However, despite these challenges, community solar is an especially promising way to expand the reach of clean electrons. Alex Reid, a solar project developer at Straight Up Solar, pointed out that while current regulatory issues are preventing community solar projects from being built, it is not due to a lack of interest or excitement. Community solar would help expand addressable solar markets, but it requires coordination with many stakeholders to make work. And with no standard practice, this becomes incredibly difficult.
For more energy literacy, check out our first EnLit piece here!