Report: Community Solar Power – Obstacles and Opportunities

Date: 8 Sep 2010 | posted in: Energy | 4 Facebooktwitterredditmail

Update November 2010 :The original edition of Community Solar Power received a lot of attention, for which we at the Institute for Local Self-Reliance are very grateful. The grading system we used for community solar projects was of particular interest, especially our offer of higher scores for projects placed on rooftops rather than on the ground.

In particular, the excellent folks at the Clean Energy Collective (whose project is featured in this report) engaged us on the criteria we used for rooftop and ground-mounted solar power. After several in-depth conversations, we offer this revision to Community Solar Power and to the grades we provided for solar project location. We think that our revised grading system better reflects the advantages of distributed renewable energy as well as the best efforts of community solar projects to provide their participants with the best value.

For a more thorough discussion of the location conversation, see this post to our distributed energy web resource, Energy Self-Reliant States: Community Solar: Better on the Roof?  And download the updated edition of the report below.

Download Community Solar Power: Obstacles and Opportunities

Community solar power can offer unique benefits in the expansion of solar power, from greater participation and ownership of solar to a greater dispersion of the economic benefits of harnessing the sun’s energy. But community solar faces significant barriers in a market where the “old rules” favor corporate, large-scale development. New rules – better community solar policy and regulations – are needed to remove these barriers.

In this report, we explore whether community solar can:

  • Overcome financial and institutional barriers to collectively-owned solar.
  • Increase the number of people who can invest in and own decentralized solar power.
  • Offer an affordable opportunity to “go solar.”
  • Disperse the economic benefits of solar power development.
  • Tap unused space on existing structures rather than open ground for solar modules.
  • Replicate.

sample community solar project

Existing community solar projects have met many of these goals and overcome barriers to get electrons flowing.  The Clean Energy Collective in Colorado has built a 78 kilowatt solar array on the purchase of 20 shares by local community members.  A group in University Park, Maryland, put a 22 kilowatt rooftop solar array on a local church with 30 community members investing.

However, even the best community solar projects fall short of being a successful and replicable model for community solar power.  But their failure is not their responsibility.  There are still substantial barriers presented by solar policy – the old rules – that need to be removed and new rules that are needed to enable more community solar.

Efforts to remove barriers and enable community solar have been limited.  A Washington state community solar incentive offers significant cash flow, but it expires in 2020.  A Colorado solar gardens law creates a legal structure for community solar but perhaps at the expense of rooftop solar development.  A handful of states have community (or virtual) net metering that means a group of solar investors can share the output from a solar array, but it doesn’t reduce many of the other significant barriers affecting community solar.

Future community solar policy must make it easy for any community solar organization to use federal tax incentives or must modify federal tax incentives to make them easy to access.  Community solar policies must make it simpler for community solar projects to comply with securities regulations.  New policies should also favor rooftop solar because it reduces controversies regarding open space and simplifies connections to the existing electrical grid.  Finally, new community solar policy should favor community solar projects that offer participants actual ownership shares, because it increases both the economic returns and the constituency for distributed solar power.

Our report examines nine existing community solar projects as well as other models to encourage community solar power.  It analyzes existing solar policy and presents recommendations for the new rules for solar power.  To see more, click below to read Community Solar Power: Obstacles and Opportunities.

UpdateOur location grades sparked a good conversation about building-mounted v. ground-mounted PV systems.  Read more here.

Download the PDF

John Farrell
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John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power.

John Farrell
Follow John Farrell:
John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power.

4 Responses

  1. GeraldR

    The nub of a big problem: “Dispersing the benefits means broadening participation and more importantly ownership of solar power, so that the economic benefits accrue to many, varied investors.” If you were an investor or government with shares in a utility, and, until now, an exclusive right to the ‘economic benefits’, how would you feel about this. The existing model where utilities fund capital investment through charges i.e. use the customer’s money to make those investments but without passing the profit back seems more desirable.

    The other problem that needs to be addressed is that economic benefits that accrue to many investors, if available, will attract more capital to the market. This creates a problem which is seen in the German market – capacity grows at a greater rate than it would if utilities alone were left to the task, then the supply/demand thing kicks in. Since solar, wind and geothermal have near 0 run rates, when largely deployed they compete the market price down – not a happy state for other producers, particularly when they have traditionally used supply constraint as a means of justifying higher prices including big money makers like TOU pricing and demand charges.

    The dichotomy between rooftop and solar gardens is more imagined than real. The most common life-form in my area is 10 kW AC ground mounts on trackers which feature lowest installed cost due to complete factory assembly and lowest land use since they stand high on a single pole (comparable to an old school satellite dish). The second most popular is 10 kW rooftop systems (note how regulation and rate structure can profoundly influence the size of systems). If community projects are as small as the examples given, they would appeal to a different class of investor than those who can afford their own systems or, for that matter, would make a direct investment in a co-op. As the report mentions, perhaps the main value of these solar garden projects is in creating awareness of the technology.