The Long Wait for Community Solar in Washington State — Episode 147 of Local Energy Rules

Mason Rolph:

First off, if those energy burden reduction benefits can’t be accessed by tons of subscribers, and I, that includes, you know, anyone living in multi-family housing, any low income folks, there’s a huge equity issue there. The second piece is that with CETA, we now know what amount of clean energy we need and when we need it by: a hundred percent by 2045. The question now is how that’s gonna happen. And it can either happen in a way that’s owned by customers and benefits the people who own it, or it can be owned by these large monopolistic utilities.

John Farrell:

A decade ago Washington state was known for having the best community solar incentives in the country, targeting public buildings and locally manufactured solar panels. Fast forward to today and the state’s limited community solar development is happening despite state policy, not because of it. One shining light is Olympia Community Solar, a nonprofit inspired to share solar like community supported agriculture shares vegetables. I spoke with its board chair, Mason Rolph in November, 2021 about the success in bringing green energy to the evergreen state and how state policy could make community solar easier and more accessible to all. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance and this is Local Energy Rules, a biweekly podcast sharing powerful stories about local, renewable energy. Mason, welcome to Local Energy Rules.

Mason Rolph:

Thank you so much for having me, John. I’m so excited to talk to you about my favorite subject, solar energy.

John Farrell:

Well, I always start by just asking you, speaking of solar energy, like how did you get into community solar development? I mean, leading a business of any kind can be challenging. And here you are innovating in this space where there are tax liability issues, there’s utility bureaucracy, there’s public policy stuff. Why do you wanna do this?

Mason Rolph:

I’d say two reasons. The first was I got introduced to community supported agriculture back when I was an undergraduate student and community supported agriculture is pretty much the same model as community solar, just with you get vegetables except instead of energy. And so I actually thought I had come across something new. It’s like, Hey, we could organize solar energy this way. And then I learned it was the fastest growing subsection of the solar industry and definitely not something I had invented, but that’s how I came across the idea. But a few years back, I, you know, I’ve been organizing and advocating for climate related ballot initiatives and, uh, local climate planning, as well as fighting back against some major fossil fuel infrastructure projects. And when the ballot initiative gets voted down and you know, the state or the government pours billions of dollars into the infrastructure project, it feels really hopeless. So I really wanted something local that we could control and actually feel like we’re making a difference. Whereas all these other efforts just felt like a lot of effort for, for no change.

John Farrell:

I think that’s definitely a kind of theme we see on this podcast is folks really loving this sort of tangible nature of doing something local. Can you just tell me a little bit about, so Olympia community solar, it’s a recent creation, relatively recent, and you’ve got more than one community solar project already. Can you tell us a little bit about the projects that you’ve been organizing that allow people to pool their resources and go solar?

Mason Rolph:

Yeah. Olympia Community Solar, you can find us online at olysol.org. We are a 501c3 charity and the organization was started in late 2018 after we had found a site for our first community solar project. It’s a local children’s museum. We were putting together the project in, we actually first, we went around to some other nonprofits in the area that do climate related work. And we asked them to sponsor the project and, you know, they reviewed the, the proposal we had. And, um, at the time they, they looked at it and said that they don’t think this will economically pencil to do this project. So I’m not gonna sit around and let some folks in an older generation tell us what’s possible and what’s not. So the pretty much the next day after hearing that, we incorporated the nonprofit to do it ourselves.

So the first project on the Hands On Children’s Museum in Olympia is a 117 kilowatt solar installation. We divided up the total price of the project into $300 solar units. Each solar unit represents about half of one of the solar panels and then community members could purchase a solar unit for themselves, in which case they are basically subscribing to get the energy benefits of that half of a solar panel for about 20 years, or they could donate a unit to a local nonprofit, and we had 14 nonprofits sign up to be participants, and they actually received a lot of donations. So we ended up selling about 700 units and then also received some grant support, shout out to the USDA and the Tides Foundation. And the system went online this spring in February. And since then it’s generated enough energy just through this summer to power about 12 Washington homes for a year. It’s definitely working well. And I’m really looking forward to, coming up in February, we’ll be making the first energy payment to all the participants. And so just taking the years energy, dividing it up between all 97 owners and sending out checks, which I’m super excited about. That’s our first project.

The second one is fully enrolled, but not yet built. It’s on the Olympia Farmers Market. And then over the summer, our team also sponsored a group purchasing program. So residential homeowners could come together and group purchase solar installations and get a discount. We had 140 homeowners join that program, which was about triple of what we expected. So it kind of blew us away in the reception that it had. And then generally we just focus on education. We’ve done few projects around teaching solar installers skills for working with more diverse clients. We’ve sent solar educational materials to Washington state prisons so that incarcerated students can learn about how to become solar installers. And then the final area we work on, which I’d love to talk a lot about today, is policy. Washington currently does not have any enabling policy for community solar and has never had incentives to support low income communities in accessing solar. And those are our two pushes in the upcoming legislative session.

John Farrell:

I just had to say how much I enjoy that your second project is on the farmer’s market, given the fact that you got into this kind of thinking of community solar is the like equivalent of a CSA, but for solar instead of vegetables, and here you are now tying back together into the agriculture exchange there with the farmer’s market. I think that’s terrific.

Why don’t we just go ahead and dive into the policy, I think it’s something that people understand, a lot of our listeners understand as you know, presenting often a barrier to entrepreneurial spirit that comes into this. It’s so surprising to me that it can be so difficult for folks to say, I have this great business idea. I have lots of people who want to give me money to do it. And yet the framework that we have around how we do electricity business often makes it very challenging. So you mentioned that there’s no like enabling policy for community solar, and as ILSR has covered, there are about 16 states that have some sort of enabling legislation to help facilitate that interaction. And we can go a little more in the weeds on how that works, but what is it that Washington state could really do that would really unlock this opportunity to let people do solar together?

Mason Rolph:

In states with enabling policy, when someone builds a community solar project and subscribes customers, those customers can receive credits from the solar projects generation directly on their utility electric bill. That’s a system called virtual net metering, basically just similar to normal net metering, just that the solar array is not located on the same site where the customer is being served. And so really you need a utility to agree to partner with you to facilitate that bill crediting service. Since we don’t have policy that says utilities have to make that partnership here in Washington, uh, we’ve been turned down by, by our local utility. And so far have not found one that will partner with us to do that service. Really what we need is a state mandate and we’re shooting that it would be mandatory for the three investor owned utilities in Washington, which serve about 50% of customers in Washington, and then voluntary for consumer owned utilities in Washington to participate in a virtual net metering slash community solar program. So our proposal is acknowledging that barriers prevent most Washingtonians from accessing the benefits of rooftop solar. And we can go into the reasons for that. My, the, the way I like to describe it is if you own your home, if you have a relatively new roof, if your roof is unshaded, if you don’t live in multifamily housing, and if you have the capital or access to financing, you, you’re a great rooftop solar customer. But if any of those factors don’t line up for you, you’ll encounter a barrier to accessing rooftop solar.

John Farrell:

I have to say that in a previous conversation, you described this as your five finger rule and in the video of our chat here, I would be remiss if I didn’t know that you held up your hand with five fingers and counted through these. And I think it’s just great to think about how simple it can be to illustrate to people how many things you need to have line up for you to make this work.

Mason Rolph:

Yeah. And every solar installer I work with and talk to, and I’m sure you encounter, can tell you how many customers they’ve had to turn away because someone doesn’t have access to rooftop solar. Washington, we do have a law called the Clean Energy Transformation Act. It’s our 100% clean energy mandate. It says by 2045, we have to be a hundred percent renewable energy, no, you know, REC trading to get around it. It’s one of the strongest in the, in the nation. And the big problem that I see is unless every customer in Washington has access to solar, reaching that goal is gonna be next to impossible. So, so our proposal really is focused on expanding access to the benefits of solar, growing Washington’s solar industry, creating jobs, and reducing pollution, and the way we’re gonna do that.

So the, the bill proposes that the Washington Utility and Transportation Commission, our regulatory entity, would create a community solar program. Community solar project managers would get certified to provide services under that program. And once the project manager are, is in the program, then they can apply to have projects join the program. So once a project is certified through the UTC, they can access the utility’s bill crediting systems, and then the utility is responsible for taking the project managers subscription information and applying the bill credits to all the subscribers’ monthly electric bills. I, I think of it kind of as a triangular relationship where you have the utility, the community solar project manager, and the customer all in relationship. The customer signs up for a community solar project. The project manager reports their to the utility along with the project’s energy generation, and then the utility provides that customer with credits for their subscription. And that relationship is what we need enshrined in Washington’s law.

A couple really important reasons for that is to start out what a couple utilities in Washington are currently offering voluntary programs, where they allow their own customers access to this bill crediting, but only for projects they own. And I really strongly believe that a competitive marketplace, where utility offerings and third party offerings can compete, is gonna be really important in getting good product. A couple other things is we need consumer protection. Uh, and then we also need to enshrine in law what credit value the subscribers are getting for their energy. If there’s no law, then the utilities can set that credit rate at whatever they want, whether or not it’s fair to the customer. And we’ve seen rates as low as 4 cents per kilowatt hour, which is, you know, far less than half of our retail rate. Um, so part of our proposal is that bill credits should be valued at the retail rate, less a fee imposed for provide the bill crediting service by the utility. So the utility has a way to recoup their costs, but the customer still receives, you know, a fair rate for their energy. And then we’ve also written into the program carve outs for low income customers and service providers that serve low income customers so that they can have fair access to participate.

John Farrell:

We’re going to take a short break. When we come back, we discuss the role of solar in addressing energy burden, Mason’s efforts to pass better policy in the state of Washington, and why it would serve a broader goal than just reducing greenhouse gas emissions to allow more people to own a share of community solar. You’re listening to a Local Energy Rules interview with Mason Rolph, board chair of Olympia Community Solar in Olympia, Washington.

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John Farrell:

I was really struck by your critique of the clean energy transformation act, the state’s mandate to get to a hundred percent renewable by 2045, and the concern that if customers don’t have access to rooftop solar, that you can’t get there. I can imagine the investor utilities who are also probably among those who have turned you down in doing this bill crediting system for community solar would say, oh, but we can go out and do that. We can build solar arrays and wind turbines and whatever. And they’re also the ones who are probably saying, we don’t need to give you very much money for that community solar you generate, because it’s really not worth very much to us. Can you talk a little bit more about first of all, like why you see it as so important to have this policy as a way to succeed in reaching that overall goal, but maybe what the tensions are with the utility here and why you see it as important that the market structure changes.

Mason Rolph:

Thank you. Any person that tries to sell solar starts with the benefit to the customer. So, you know, when someone has solar energy, they can reduce their energy burden, which is how much of their annual income they’re paying for electricity. And I’ll mention, you know, for higher income customers, that’s usually around three to five percent of their annual income, but for low income customers, that can be up to 12 to 15 percent. So often for low income customers, it’s the second highest cost they have after the cost of rent or a mortgage. So first off, like if those energy burden reduction benefits can’t be accessed by tons of subscribers and I’ll, that includes, you know, anyone living in multifamily housing, any low-income folks, there’s a huge equity issue there.

The second piece is that with CETA, we now know what level of clean energy we need and when we need it by: a hundred percent by 2045, the question now is how that’s gonna happen. And it can either happen in a way that’s owned by customers and benefits the people who own it, or it can be owned by these large monopolistic utilities, which I kind of imagine, you know, we, we just had Halloween and I kind of imagine these utilities as you know, the villain in Scooby-Doo where at the end, they like pulled the, pulled the mask off and it’s like, oh, this electric utility, it’s actually a fossil fuel corporation. And it’s like, right now, the way it’s gonna roll out without a change in policy is that the utilities will own all of the generating resources. I don’t know, I’d call it similar to like a, a landlord offering rental to their customers compared to someone owning a home for themselves. So, yeah, it’s, it’s a question of ownership and it’s also a question of making sure that this awesome clean energy technology can everyone who needs it

John Farrell:

So we’ve been, at ILSR, we just did a survey of solar developers. We released it around the country have just started, been compiling the responses. And I just think there’s sort of an interesting tie in here about this issue of, you know, that utility company in the costume, but one of the things that we asked folks was, you know, there are these policies right now on the books in most states that say, okay, well, if you aren’t a utility, but you generate energy, whether it’s, you know, on a rooftop, maybe it’s on a business or a home. If you, if you have all of those five fingers still up, right? The access as a customer, to all of those things, a, a sunny rooftop, that’s relatively new, that’s not shaded, et cetera and you can do solar, there are these rules that are on the books in most states to enable folks to make those connections. But the utility’s kind of in charge of making sure that those rules are followed. And one of the things that we’ve found is most solar developers say, actually, the utilities have made this really difficult, even with the rules that we have on the books.

You know, you are in the process of the developing your second project. So it’s probably a relatively new space for you, but are you finding that similarly that this is a struggle in terms of making sure that utilities follow the rules for how you can bring energy to market? And do you see that as a problem as well in terms of how you might be successful at doing more community solar?

Mason Rolph:

Well, the projects we’ve built so far, thankfully we’ve been able to build them under Washington’s limited net metering law. So we haven’t encountered any problems there. The big issue is that there aren’t any rules for the utilities to follow for community solar, or at least how community solar should work. And I’ll say, you know, we went to the legislature in 2020 with a strong bill to create this program. Utilities fought us every step of the way and we ended up having a loss that session. This spring, during the 2021 legislative session, we went back with a new proposal. Again, electric utilities were our chief opposition, even though our team we’ve been able to organize labor advocates, environmental advocates, cities, and counties, uh, we have all the energy advocacy organizations supporting. So we have a really strong, diverse coalition working on this. Versus half a dozen, extremely powerful multi-billion dollar utilities.

And so, yeah, it’s, it’s an uphill battle in that sense. And the utilities, they claim that upgrading their billing system to provide this new bill crediting service is a rocket science, it’s brain surgery. You know, it’s super expensive and hard, but when we have community solar happening in over 40 states, by hundreds of utilities, it can’t be that hard. And it’s really just gonna take the state saying, expand your services, satisfy your new customer demand and, and, and do this. So we’re going back to the legislature in the upcoming session, we have a sponsor for the bill, and we’re gonna try again, but who knows, you know, with the same utility opposition, I don’t know how much further we’ll get this year versus the last two. And, you know, I know we don’t have too much time left. So I do want to talk a little bit about the second half of our proposal, which is low income incentive.

And so acknowledging that energy burden and barriers to solar energy disproportionately affect low income communities, this piece of the proposal would create a grant style fund for low income solar projects. Washington State University has this awesome energy extension program. And they’ve volunteered to manage this capital fund. Our goal is to overcome financial barriers that prevent whole communities from accessing solar and deploy at least 40 megawatts of solar on low income households. So the way it works is that the project manager could apply for up to a hundred percent of the upfront capital cost of solar projects or the cost of subscriptions in community solar projects that would benefit low income customers. And so the project manager would have to certify that the participant is income eligible, provide proof that the solar installation is built, provide annual reporting, making sure those benefits are actually being realized by the low income customers. And yeah, it would be the first time in Washington state that the state has put funding specifically towards low income solar.

We did have an incentive program that is somewhat famous us for being how to say it… overly generous. Yeah. But it was a production incentive. So it didn’t help a customer install their solar. It just paid them extra money for every kilowatt hour they produced. So it didn’t overcome the barriers that low income customers face when they approach solar. So we’re tying these two proposals together and we’re running them as a single bill. And when utilities come forward, you know, they really want this incentive funding. It’ll help them reach their clean energy goal. It’ll support their energy assistance programs, and they’ll have some great PR from doing it. And so by tying them together, they’ll have to directly oppose low income solar incentives in order to fight our community solar effort. Our main goal is let’s get access for everyone. And once that access is enshrined in law, we can fund low income projects and actually extend those benefits to the folks who have been left out of the conversation.

John Farrell:

It’s funny that you mention this idea of a PR benefit. I still remember, so Xcel energy, which is the utility serving about half of the electric load in Minnesota and is the utility required by our state law to provide community solar, which is the largest program in the country at this point with about 800 megawats of installed community solar, they have, in their corporate headquarters, which is in Minneapolis, a huge window encompassing banner touting having the nation leading community solar program. And yet every time they’re in an official proceeding before a public utilities commission or at the legislature, they are trying to get rid of it as desperately as they can. And so it’s this interesting problem for them of recognizing they have this enormous PR win on one side. But as you highlighted in talking about reaching the state’s ambitious clean energy goal, it’s also this question of who’s gonna get the financial benefit and the utility looks at this and says, well, for our shareholders, community solar is not as big a win as things that we might own.

I don’t think there’s any great way to address that in a, in a sort of win-win way, other than for the utility to recognize, you’re gonna have to share the wealth a little bit here. There’s not a need for you to own everything in 2021 as there might have been in 1921.

Mason Rolph:

Our goal for this legislative session is pretty much that exact thing, it’s convincing legislators and, you know, eventually the utilities, that not only is solar a climate solution, but also a vehicle for social and economic justice. And once that happens, I think it’ll be hard for any legislator or utility to oppose the effort. Yeah. So, you know, if something we’ve talked about today rings true for the work that our, the listeners are doing, I’d love to connect with you, uh, check us out at olysol.org or on social media, Olympia Solar. We need financial support for lobbying this year. We also need advocate support who can tell stories of how community solar works elsewhere and why it’ll be so important for Washington’s clean energy transition. So please come connect with us and support our effort.

John Farrell:

Well, Mason, thank you so much for joining me to talk about the great work that you’re already doing, despite all of the barriers that you face to get community solar working in Washington state, but also about your excellent advocacy work to try to make community solar more possible for you, you and for other folks that are working on it. We really appreciate talking to you.

Mason Rolph:

Cheers. Thank you for your time, John.

John Farrell:

Thank you so much for listening to this episode of Local Energy Rules with Mason Rolph, board chair at Olympia Community Solar. On the show page, look for links to the Olympia community solar website olysol.org, that’s O L Y S O l.org. And to the state’s Clean Energy Transformation Act, which unfortunately doesn’t do enough to democratize access to clean energy and its economic benefits. On ILSR’s website, you can find an article explaining virtual net metering, our national community solar program tracker, and our community power map, which includes a database of community solar programs across the country. Local Energy Rules is produced by myself and Maria McCoy with editing provided by Audio Engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear more powerful stories of communities taking on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.