Thanks to innovative energy policy, residents of Ontario can invest in local solar power projects by buying SolarShare bonds. The $1,000 bond provides a 5% annual return over five years and the money is invested in solar power projects across the province (as the chart below shows, this beats a savings account with 0.8% interest or even a 5-year U.S. treasury, with 0.91% interest).… Read More
Last week, Brian Foley of the Sierra Club published an interview with John Farrell on “grassroots solar” on the Sierra Club blog, Compass. Read the interview below, or click through to the Compass. Interview: Grassroots Solar You hear about gigantic solar and wind farms that require vast amounts of land. But what about the decentralized emergence … Read More
Maine’s Net Energy Billing system (2011) allows shared ownership of renewable facilities and virtual net metering. Participants must own a portion of the generation facility. This post summarizes the policy and compiles additional Maine community solar resources.… Read More
If you like reading about “what we can do better” in community solar policy, check out our report – Community Solar Power: Obstacles and Opportunities – but if you like a very detailed exploration of how the three major models for community solar navigate the ins and outs of existing incentives and regulations, and a primer on how to set up a community solar project, you can’t go wrong with NREL’s Guide to Community Solar.
Last week I briefly reviewed IREC’s new (almost) Best Practices for Community Solar and Wind Generation. Craig Morris provided another review this week that provides a very good perspective.
For one, Craig notes that there’s an unhealthy focus on net metering to the exclusion of other policies (like feed-in tariffs) that can provide a higher value for community projects. I think he illustrates one of the biggest problems with continuing to rely on net metering for distributed renewable energy projects:
Generally, under net-metering the utility company gets your “excess” solar power for free, say, at the end of the calendar year – solar power that offset the most expensive power on the spot market during times of peak demand in the early afternoon during the summer. You give that to your utility for free under net-metering. [emphasis added]
The report also misses a chance to highlight the global best practices for community renewables, or even the best practices in the U.S.:
Perhaps unsurprisingly, when IREC went looking for best practices, it did not look at leading global markets, but stayed within the confines of US borders. The study is typical of US analyses in that respect (see this report at Renewables International). Clearly, the dominant global policy to incentivize renewables is feed-in tariffs, especially in ramping up community projects. IREC even ignores FITs within the US, comparing policies in Massachusetts, California, and Maine, for instance, while Vermont, which has successful, but rather limited feed-in tariff scheme, is mentioned only in terms of its “group billing program.”
Craig also notes the glaring issue of ownership. The IREC report defines community ownership as “direct ownership, third-party ownership, and utility ownership.”
Which begs the question of what kind of “community” system can be owned by a utility. Certainly in Germany, a community system is by definition one owned by the community.
IREC goes on to state a preference for utility ownership, an idea I find appalling. As I noted in my review, utility-owned community solar projects have often asked community participants to pay more for electricity, at a time when most people going solar are making a return on investment.
Overall, I think I agree with Craig’s conclusion:
Given the current policy framework in the US, the report is probably useful. For instance, it discusses how community projects can avoid having to pay income tax on the power generated and how federal tax credits can be utilized. In other respects, IREC’s thinking is clearly still bound to net-metering; if you switch to feed-in tariffs, for instance, the question of “demand charges,” which seems to be an important issue for IREC, becomes completely irrelevant. In effect, the proposals basically show how progress could be made within the current legal framework without any major changes.
IREC’s report provides a good perspective of how to advance community renewables under a “business as usual” policy framework. If you agree that we might be able to find better policy, however, you might want to read [shameless promotion alert] Community Solar Power: Obstacles and Opportunities instead.
In mid October, Leon County, FL, joined Babylon, NY, Palm Desert, CA, and Sonoma County, CA, as well as the California Attorney General, Sierra Club, and Natural Resources Defense Council in suing the Federal Housing Finance Agency over their opposition to the Property Assessed Clean Energy (PACE) municipal energy financing program. These lawsuits were complemented by … Read More
Residential solar PV in Los Angeles is getting a huge boost from a new community solar buying group. With typical residential installation costs for crystalline solar PV, residents would see a 20-year payback on a solar PV installation or a minimal 2% IRR on a 25-year investment (without factoring an inverter replacement). But what about a … Read More