The sun is still only rising for the commercial and residential deployment of photovoltaics (PV) and, as barriers to development are identified, innovative approaches to solar financing continue to sprout.
Recent advancements to address these challenges have included solar subsidies, third-party leasing options and clean energy-specific crowd-funding platforms. In concert with a precipitous drop in PV module prices in the last five years and notable economies of scale, never before has broad-based solar seemed so viable.
But no matter how durable the bucket, if the well is dry you can’t drink the water. Only about one quarter of residential roof area is suitable for hosting an on-site solar system, according to the National Renewable Energy Laboratory. This means that 75 percent of the population, including renters and those with small or shaded roofs, cannot participate in the rooftop solar revolution. What options exist for the majority, and how does the solar industry successfully navigate this obstacle?
At least eight states throughout the U.S. have caught on to policy-oriented solutions, albeit with various legislative nuances: virtual or group net metering, shared renewables, and solar gardens legislation.
Picture a solar array located on the roof of a school or community center, or ground-mounted on a brownfield site. Local residents are able to purchase individual solar panels in the shared project. The site, with the help of a developer, is able to sell the energy it produces back to the grid, which then gets credited to individual utility bills of the local residents. The result is distributed energy on a small and medium scale (with system capacity anywhere from 50 kilowatts to 2 megawatts) requiring minimal new grid infrastructure.
The Solar Gardens Institute has an informative website dedicated to the progress of such policies here. While states like Colorado, Massachusetts, and Vermont might be leading the way, the rest are only catching up.
Complementary mechanisms to this legislation are necessary to promote community-scale renewable energy, known as CLEAN (Clean Local Energy Accessible Now) contracts or feed-in-tariffs depending on the jurisdiction, along with special carve outs in energy standards. The combination of such policies and incentives ensure barriers can be removed with regards to the deployment of distributed generation (DG).
Back to our bucket analogy, being able to now access water may quench our thirst, but not owning the means of collection comes at a price. In California, home to the highest installed capacity of PV in the U.S., solar leasing accounts for the majority of growth in DG. The market is overwhelmingly represented by externally serviced and third party-owned systems, as confirmed in a recent Solar PV Report survey of the some of the highest-growth solar cities of the Golden State.
Allowing individuals and institutions, particularly those with site-specific and financial constraints, to benefit from off-site generation of renewable energy has the potential to unleash community solar. Community solar refers to a PV system providing power and financial benefits to multiple community members, a possibility made more certain through project ownership.
Just last month, California’s SB 43 and AB 1014 passed through initial votes in their respective chambers. Collectively dubbed the Shared Renewable Energy Self-Generation Program, the bills enable customers of the State’s three major investor-owned utilities to contract for shared production in exchange for a credit against their electricity use. Where AB 1014 differs, however, is its recent revision to require that individuals go directly through the IOU to access off-site shared renewables.
SB 843, a similar bill to AB 1014, failed to pass last year due to heavy lobbying from PG&E, utility for most of Northern California. The outcome this year though looks to be different, as the major California IOU’s have ensured amendments to the proposed bills. The amendments largely surround the issue of non-subscriber ratepayers subsidizing grid costs, resulting from the impacts of net-metering via this new “shared renewables” segment. Vote Solar recently released this study, concluding that “net-metering’s benefits to the ratepayers of those utilities outweigh the costs.”
There is potential for a 500 megawatts shared renewable energy program with a carve out for projects smaller than 1 megawatt, as well as those situated in traditionally disadvantaged communities. It is still too early to accurately predict how these bills will converge and be implemented, if passed.
We are fast approaching a crossroads in how societies transition electricity infrastructure to meet the demands of future generations. In moving towards a cleaner, decentralized grid, where we are going is not going to be nearly as important as how we get there.
While technological and legislative progress continues to provide helpful roadsigns for the transition, there needs to be a similar discourse in redesigning business models; ensuring they remain socially relevant, strengthening regional energy resilience through prioritizing local ownership, democratic management and equal access to financial resources.
Across the globe, Europe has led the way with a strong co-operative energy sector. More than 50 percent of renewable energy electricity generation in Denmark and Germany is categorized as community-owned and/or cooperative-based. Key to Germany’s success is the fact that anyone can participate, citizens have the policy mechanisms to build their own renewable energy sources and sell the power they produce to the grid. In addition, streamlined permitting and simpler metering rules have allowed for more equitable and local growth.
Conversely, only 1 percent of renewable energy electricity generation in the U.S. is community-owned. Growth in this segment is inevitable.
An renewable energy cooperative has the advantage of taking an otherwise disparate legal and financial entity, such as a cluster of homes or community organizations, and offering a model by which to pool space, finances and sweat equity (i.e.effort-based contributions).
Community ownership of renewable energy also ensures transference of technical knowledge — a key driver as we transition towards a green jobs economy — that is relevant to social or cultural mores, and rooted in the need for self-reliance and adaptive capacity.
Building projects that emphasize community-led, cooperatively owned, grassroots investor-supported solar power adds yet one more road sign along the way.
Lead image: Solar community via Shutterstock