Technology

Obama’s sense of solar

 By Andrew Burger

US solar energy industry leaders gathered at the White House for the National Community Solar Summit November 17. At the end of the day, White House officials announced that 68 cities, states and businesses would join to foster growth of community solar power projects – the focus being on scaling up solar installations for low- and moderate-income households. Community solar has been on the rise in the US. Maryland is moving forward with its own community solar power initiative, as are governments in at least 14 other US states. Federal and state incentives would go a long way towards realizing community solar’s potential to ¨democratizing¨ emissions-free solar power by making it accessible to nearly all the Americans who for one reason or another can’t have solar PV systems installed. It would also give a most welcome boost to the US solar industry as scaling back of the key federal solar investment tax credit (ITC) approaches…

Responding to an invitation from the Obama Administration, U.S. solar energy industry leaders gathered at the White House on November 17 for the National Community Solar Summit. Upon the Summit’s closing, White House officials announced that 68 cities, states and businesses would join the federal government in a wide-ranging, nationwide effort to spur development of community solar energy projects.

Support for community solar has been building up across the U.S. in recent years. Alerting its clients to the launch of the National Community Solar Initiative (NCSI), Washington, D.C.-based Ballard Spahr’s Energy and Project Finance group noted that ¨more than 15 states have passed legislation encouraging the development of community solar projects, and more states are considering such legislation.¨

NCSI’s focal point is finding ways to scale up solar energy access for low- and moderate-income households and under-served communities. As such, it directly addresses criticism that residential solar benefits high-income U.S. households at the expense of less affluent utility grid customers.

Yearly U.S. solar installations

Solar Energy Access for All

Relying primarily on solar investment tax credits, U.S. federal energy policy has favored investments in utility-scale solar power. Pioneering residential solar energy companies have broadened access significantly by introducing low-cost solar leases that encompass systems installation and maintenance, as well as so-called ¨soft costs,¨ such as permitting and qualifying for state and federal tax credits and other incentives.

Residential solar PV installations have taken off as a result. According to the U.S. Solar Energy Industries Association (SEIA) and GTM Research, residential solar power installations surged 70 percent higher year over year in Q2 2015 to reach a record high 729 MW.

Opponents and critics in Congress and elsewhere continue to disagree with the President’s solar energy initiatives. In addition, utilities and fossil-fuel interests continue to lobby against extension of federal solar and wind energy investment and production tax credits, and spend freely to oppose initiatives at the state and local levels.

Adopting the utility industry position, critics contend that supportive policies and market mechanisms, such as net metering programs that compensate residential solar energy ¨prosumers¨ for the PV electricity they supply to the grid, penalize households that can’t host solar PV systems.

That criticism hasn’t gone unnoticed, or ignored. Following through on a National Community Solar Partnership announced by the White House this past July, NCSI presents a wide-ranging public-private alliance that tackles the issue and addresses that criticism head-on. Highlights include:

  • Setting a goal to install 300 megawatts (MW) of renewable energy in federally subsidized housing and providing technical assistance to make it easier to install solar, including clarifying how to use federal funding
  • Housing authorities, rural electric co-ops, power companies, and organizations in more than 20 states across the country are committing to put in place more than 260 solar energy projects, including projects to help low- and moderate- income communities save on their energy bills and further community solar
  • More than $520 million in independent commitments from philanthropic and impact investors, states, and cities to advance community solar and scale up solar and energy efficiency for low- and moderate- income households.

Community solar programs have the potential to reach just about all the nearly 50 percent of U.S. households that for one reason or another cannot host solar PV systems, according to a study by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL).

Furthermore, community solar could add anywhere from 5.5-11 gigawatts (GWs) of emissions-free electricity across the U.S. between 2015 and 2020, according to NREL’s “Shared Solar: Current Landscape, Market Potential, and the Impact of Federal Securities Regulation

In dollars and cents terms, that would require cumulative investment of $8.2 billion to $16.4 billion. If such a scenario were to be realized, the researchers estimate that shared solar could account for as much as half the U.S. market for distributed solar energy.

Percent of total U.S. energy consumption

Community Solar Gardens Take Root

¨We’re seeing a lot of interest in early stage community solar project finance among private investors,¨ Ballard Spahr attorney Darin Lowder, whose practice areas include climate and sustainability as well as energy and project finance, said in an interview.

¨The way the White House National Community Solar Initiative is framed, it brings together both the public and private sectors, and efforts revolving around the shared solar concept, which underlies the philosophy here,¨ he explained.

Underpinning developers’ interest, Lowder continued, is that ¨in an ideal setting, community solar combines the best in scale and siting – utility-scale systems located near consumers – with the best-credit off-taker (power utilities), and retail consumers living in areas with some of the most expensive electricity costs.¨

From that perspective, community solar is akin to the traditional utility business model in that ¨you can take advantage of utility-scale solar economics and sell the electricity at retail rates. It’s kind of the best both worlds. The reality is typically somewhere in between,¨ he added.

In 2010, Colorado was the first U.S. state to institute a community solar legislation, requiring utilities to acquire electricity from installations. That has spurred growth of so-called community solar gardens, as well as pioneering start-ups, such as Clean Energy Collective, which is developing community solar projects in partnership with First Solar, the U.S.’ leading vertically integrated solar energy company.

At present, community solar gardens are up and running in 25 U.S. states, according to community solar project developer-owner SunShare. Drawing on electricity produced by PV arrays, community solar gardens are akin to community co-ops in that participants pay a subscription fee to developer-owners to ¨plug in.¨ In return, they receive credits on their monthly utility bills.

In sum, subscribers to SunShare’s community solar projects end up paying the same or less for solar electricity than they did for conventional fossil fuels, director of business of business development Karen Gados told Eniday.

Having completed its first two community solar projects for municipal grid operator Colorado Springs Utilities, SunShare has gone on to work with independent power producer NRG Energy to build and operate eight additional community solar gardens in the Denver Metro Area under Xcel Energy’s Solar Rewards Community program. ¨We now have about 10.3 megawatts of community solar gardens operating in Colorado,¨ public relations manager Kate Laursen said.

Aiming to expand on its success in Colorado, in fall 2014 SunShare opened an office in Minneapolis, Minnesota, another U.S. state that has enacted community solar legislation. Minnesota also happens to be another Xcel Energy service territory. There, SunShare is partnering with Mortensen Construction to build community solar gardens, signing up customers to purchase subscriptions to the solar energy installations.

By providing access to solar-generated electricity to those who cannot host a system, community solar gardens are right in line with NCSI’s primary goal. SunShare’s Gados attended the White House National Community Solar Summit.¨It was inspiring to see so many people from various sectors come together,¨ she recounted.

That really sends a message to the solar industry that community solar is emerging as a major force, and a message to the private sector and policymakers across all 50 states

Regarding the significance of the White House summit, Gados said: ¨Perhaps more than any single, tangible outcome, I would say the biggest benefit and outcome was simply raising the profile of community solar nationwide and the symbolic gesture of the White House hosting the summit.

¨That really sends a message to the solar industry that community solar is emerging as a major force, and a message to the private sector and policymakers across all 50 states.¨

Minnesota’s enactment of the nation’s first uncapped community solar program illustrates community solar’s potential to stimulate deployment of emissions-free electricity generation and local economic growth, Gados pointed out.

In its first week, in December 2014, Xcel Energy received proposals to develop 400 MWs of community solar projects in Minnesota. ¨Fast forward one year, 2 GWs of projects have been proposed,¨ Gados highlighted.

For its part, SunShare has 100 MWs of projects in its Minnesota pipeline. ¨This is what I mean: Once you have a favorable policy environment, the response is overwhelming. That’s why I see the White House’s endorsement as an important public message and incentive to state governments and regulators.¨

All that said, Gados foresees a lag of perhaps two to five years between NCSI’s launch and its impact in terms of actual deployments. ¨Favorable policies, such as those in Minnesota, need to be enacted — the financial sector needs to invest, and community solar companies need to develop the capacity to design, develop, build and operate these types of facilities,¨ she elaborated.

about the author
Andrew Burger
Andrew Burger has been reporting on energy, technology, political economy, climate and the environment for a variety of online media properties for over five years.