Forthcoming Project in Washington State Illustrates Complexity of Community Solar

Date: 27 Aug 2012 | posted in: Energy, Energy Self Reliant States | 2 Facebooktwitterredditmail

Colorado just launched their long-awaited community solar gardens law (program subscribed in 30 minutes) and California is progressing on a virtual net metering law that could remove one of many roadblocks to community solar.  But the Vashon Community Solar Project in Washington State shows that doing solar community-style hasn’t become easy.

The Vashon project will be a small commercial scale (50-66 kW) solar array located at a recycling transfer station, with electricity generation reducing bills for King County and the state’s production incentive accruing to local investors (organized by a local nonprofit called the Backbone Campaign).  The project wouldn’t happen without Washington’s community solar production incentive, worth $1.08 per kWh (for community-owned projects with Washington-made solar modules, located on public property).

Prospective investors are forecast to make about $135 per year off their $1000 invested, enough to come out ahead by about $75 by the time the state’s incentive expires in 2020.  At that point, the project may be sold to King County, a third party (that may lease the system to the county), or donated to the county or a nonprofit organization.  Any of these options would result in some recompense for investors.

Some interesting twists for the project:

  • The nonprofit status of the project makes it ineligible for federal incentives, like the 30% tax credit.  On the flip side, it also means the project does not need a tax equity partner.
  • The use of Washington-made solar modules doubles the effective incentive to $1.08 from $0.54, but at the expense of a very high installed cost (over $8 per Watt).  This is likely due to the cost of the modules, as a typical installed cost for a commercial solar array of this size is closer to $4 per Watt.
  • Owners have to have a previous relationship to the Backbone campaign.  This probably means it is considered a “private solicitation” and not subject to securities regulation (indeed, the Q&A declares [pdf] “The CSP is not registered as a security with the Washington State Department of Financial Institutions”.

The Vashon community solar project shows – like the other projects featured in our 2010 report – how community solar happens for innovative citizens, but always against the odds.

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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.