Distributed energy generation, in all its forms, is a viable and vital competent of our energy future. Recent innovation has spawned myriad distribution strategies and unforeseen obstacles on the path to mass adoption. Evolving daily, there is a pivotal maturation in the eyes of consumers, developers, investors, and yes, utilities that is within reach. Yet, distributed generation’s (DG) long-term bandwagon will not accommodate all, or likely most, of today’s inventive solutions. One model, which is called community-owned solar, offers benefits on many levels.
Certainly, onsite solar PV has been beneficial, yet comes with challenges as a sole solution: existing terms are not scalable or sustainable (i.e., net-metering); power scheduling and reliability constraints; systems are largely unmanaged; and only a small share of US homes have acceptable solar exposure. Meanwhile, massive utility-scale operations sited in remote areas are dogged with political strife, monumental funding hurdles, transmission inefficiencies and unpopular energy sprawl.
Introduced in 2010 by Colorado (US) based Clean Energy Collective (CEC), the community-owned solar (COS) model, a compromise between utility-scale and roof-top residential solar, is making possible widespread penetration of distributed solar by eliminating the primary barriers to entry, accessibility and affordability, paired with intrinsic advantages for utilities.
COS is based on the foundation that locally-sited, medium-scale facilitates supported by resources pooled from several private parties in close proximity, professionally managed for optimal performance and maximum life, and predicated on mutually beneficial contracts between utilities and participating customers, will deliver the vital win-win-win required of a resilient, long-term new energy solution.
This innovation broadens the market for renewable energy participation to every ratepayer in a utility territory, most notably the population that can’t take advantage of on-site DG options, including renters, multi-unit dwellers, those with shady roofs, businesses, non-profits, etc. Individual customers are able to buy into solar PV for as little as a single panel, making clean energy ownership affordable for most and not a daunting all-or-nothing proposition.
Unravelling the puzzle
The CEC team solved a Rubik’s Cube of variables including corporate structure, securities and tax issues, on-bill crediting, and land-use, making the COS model viable, exportable and scalable. Once these were fully vetted, CEC launched the first community-owned solar project in the country, a small 86 kW pilot facility in El Jebel, Colorado. Successful deployment of this maiden COS facility was enabled through a strong partnership with a forward-thinking rural coop utility (Holy Cross Energy) willing to test the waters on behalf of its environmentally-driven owner-members.
In three-year’s time CEC’s portfolio has grown to 13 operating facilities with six utility partners and 10 facilities in the development pipeline, a total of 10MW of community-scale energy. In the next 18 months this number is expected to triple. CEC currently has 10 community solar facilities operating in its home state, representing 5MW of distributed power. It is the largest participant in Xcel Energy’s Solar*Rewards Communities program, awarded 11 solar gardens that will be accessible to 95% of Colorado ratepayers. CEC was also first to develop community-owned solar facilities in the US states of New Mexico, Minnesota. and Vermont.
Tangible value on both sides of the meter
Utilities of all types are paying close attention to COS because it is
proving to deliver reliable, long-term, in-network clean power at reasonable rates, paid for by participating ratepayers, without the vagaries of net-metering. COS supports RPS requirements, mandated in some 30 states and voluntary in seven more, with no capital costs, and provides opportunities for additional revenue streams through tax equity investment and customer financing. Utilities are also realizing a social equity component derived from proactively bringing a renewable energy solution to its customers accessible to anyone, not just high-income households.
For consumers, the principal appeal is the high-value features and benefits incorporated into the solution included at a cost comparable to or lower than individual installations: professionally managed operations, greater power generation, longer lifespan, and larger/faster returns. The cost of solar panels in a CEC community array, for example, range from $500 to $900 each, depending on the market, with minimum purchases usually as low as one panel. They are guaranteed for 50 years, which delivers a lifetime value of 200% to 1,200% (depending on geography, which is not attainable in home-sited or leased systems.
The price must be right
Though sizing considerations are vital to effectively leverage economies of scale in construction, which start at about 500 kW, the key metric in a successful deployment is building a mutually beneficial program by establishing the right price of energy, one that serves both the utility and the customer. A rate that’s too low will reflect poorly on the utility and will generate little participation. One that’s too high is not sustainable for the utility and not fair to ratepayers not participating.
CEC founder and CEO Paul Spencer describes CEC’s vision as developing a solution that looks well beyond a current site or particular owner for a 10-year span, but one that can stand the test of time as a long-term clean power source for humanity. This ownership model (the most advantageous from a capital efficiency perspective for both utilities and their ratepayers) delivers the win-win solution that can stand the test of time.
Top Photo: Clean Energy Collective’s 858kW Garfield County Airport Solar array in Rifle, Colorado
Written by Tim Braun, Principal of b2, inc based in Basalt, Colorado.