After a two year period with no incentive for community solar in Washington, legislators introduced and passed a 2022 bill “expanding equitable access to the benefits of renewable energy through community solar projects” (HB 1814). This marks an exciting milestone for Washington’s community solar advocates, as the 2022 bill incentivizes community solar development and prioritizes low-income communities through the creation of a grant-style fund. The program features a pre-certification option through the Washington State University Energy Extension program and payments to project developers, which can cover installation and some administration costs.
Watch the top state community solar programs progress in our National Community Solar Programs Tracker.
The restored incentive is better than nothing, but by relying on state funds, the state of Washington has yet to develop a robust community solar market.
Washington’s Expired Community Solar Incentive
Prior to 2020, Washington had an annual production incentive for each kilowatt-hour of electricity generated by approved solar owners. The Renewable Energy System Incentive Program (RCW 82.16.165) became effective in 2017 and provided a $110 million fund to support customers who installed residential, commercial, or community solar. The fund was split between Washington’s 48 participating electric utilities based on four participation categories: residential-scale, commercial-scale, community solar project, and shared community solar project. Funding was split proportional to the scale of the solar project, with commercial-scale projects having the largest capped amount on funding ($25,000 limit) and community solar projects having the smallest capped amount ($5,000 limit).
The maximum incentive of $5,000 per year for community solar projects would be available until 50% of the project’s total cost was earned back. Additionally, no more than 50% of a utility’s available funds could go towards community solar participants. No specific subsidized funding was provided for low-income participants.
Eligible projects also qualified for annual incentive payments to participating customers, based on the customer’s portion of the power generation of the project. The chart below shows the incentive rate for each year.
|Community Solar Rate ($/kWh)||$0.16||$0.14||$0.12||$0.10|
|Made-in-Washington Bonus ($/kWh)||$0.05||$0.04||$0.03||$0.02|
Around the same time that this incentive was created, the Washington Utilities and Transportation Commission approved a certification for incentive payments (RCW 82.16.170), which stated that community solar projects must be created by utilities, non-profits, or other local housing authorities and must have a minimum of 10 participants or 1 participant per 10 kW DC nameplate capacity, whichever is greater.
Clark Public Utilities received support from this early program. The utility maintains five community solar projects onsite at the utility Operations Center in Orchards. This project began generating electricity in June 2015 and was funded completely by participants. Participants received state production incentives beginning in 2017, when the early state incentive was implemented. All residential customers of Clark Public Utilities were eligible to purchase units, equal to 1/12 of a solar panel, for $100. In exchange, customers would receive energy generation credits on their electricity bills based on the number of units purchased. After the first project sold out in one day, four more projects were completed and units sold out in less than one month.
Washington’s Governor Vetoes a 2020 Community Solar Incentive
On March 12th, 2020, the Legislature introduced HB 2248 to increase equitable access by expanding community solar incentives for low-income participants. This incentive was intended to help solar project developers recover administrative start-up fees and was not to exceed $20,000 per project. After the Washington House and Senate signed off on the bill, Governor Inslee vetoed funding for the bill due to budget cuts spurred by the COVID-19 pandemic.
Despite this loss, Washington community solar advocates such as Olympia Community Solar committed to pass a new community solar incentive bill.
Listen to our early 2022 interview with Mason Rolph, President of Olympia Community Solar.
Expanding Access: Washington’s New Community Solar Program
In January 2022, Washington Representatives Sharon Shewmake and Liz Berry introduced HB 1814, a bill expanding equitable access to renewable energy through community solar projects. The 2022 bill creates a community solar program run by Washington’s utility regulatory board. Under the proposed program, community solar project managers can apply to the program, become certified, and receive bill credits for their projects. Community solar gardens may range between 12 and 199 kilowatts of nameplate capacity. They must serve subscribers who are low-income, a low-income service provider, a public agency, or a tribal agency.
The 2022 bill incentivizes the building of solar projects through a grant-style fund. The $100 million fund, managed by Washington State University Energy Extension, can be used to fully cover the costs of solar installation. The project administrator can recover up to $20,000 in administration costs, as well. Washington State University must attempt to equitably distribute incentive funds throughout the state, and will do so by allocating funds based on the proportion of the state’s low-income customers served by each utility and other factors.
Everyone needs to be a part of the green energy future. In the past, solar energy incentive programs have primarily benefited people who can dole out cash for the panels and installation. We can do more to include everyone in the transition to a green economy and together, with this bill, we will.
– Rep. Shewmake (Source: Olympia Community Solar)
Almost three years after the veto of HB 2248, Governor Inslee signed HB 1814 in 2022, approving the new community solar bill credit and grant program. The first round of grant funding will begin in late 2023, giving community solar administrators a one-time low-income incentive payment from a participating electric utility while enabling subscribers to earn credits on their electricity bills. This bill has garnered the support of many renewable energy advocates across Washington.
Washington’s Community Solar Outlook
Community solar in Washington has looked different from the competitive, subscription-based programs in other states due to limiting rules and policies. One shortcoming has been the state’s limited flexibility in ownership structure. Flexibility, one of ILSR’s four principles for successful community renewable energy, is necessary for a competitive community solar market. Washington’s rules, in contrast, limit community solar ownership to utilities, non-profits, and tribal housing authorities.
Lack of flexibility does not preclude the program from having meaningful benefits, as non-profit organizations have jumped on the opportunity to bring solar to their communities.
In November 2020, Olympia Community Solar installed 297 solar panels onto the rooftop of the Hands on Children’s Museum in downtown Olympia, creating the Hummingbird Project. Instead of receiving credits on their electricity bill, customers make a one-time block purchase of $300 to buy a solar unit. Then, participants are sent back the value of their unit’s electricity production or they can donate their unit to a local non-profit. Additionally, instead of receiving the value of their electricity production directly from the utility, customers are reimbursed by Olympia Community Solar. Despite this unique model, the Hummingbird Project is the largest community solar project in Thurston County, with 800 solar units generating enough energy to power 12 homes.
The benefits of solar energy should be accessible to everyone, regardless of where they live or their income. This legislation is a small step in Washington’s progress toward a clean, affordable, and just clean energy transition.
– Mason Rolph, president of Olympia Community Solar
Organizations like Olympia Community Solar will have more support under the 2022 bill expanding access to renewable energy.
For more on solar in Washington, check out these ILSR resources:
- The Long Wait for Community Solar in Washington State — Episode 147 of Local Energy Rules (2022)
- Forthcoming Project in Washington State Illustrates Complexity of Community Solar (2012)
- Washington State sets aside solar incentives for “community solar” (2009)
Learn more about community solar in one of these ILSR reports:
|Designing Community Solar Programs that Promote Racial and Economic Equity|
|Minnesota’s Solar Gardens: the Status and Benefits of Community Solar|
|Beyond Sharing — How Communities Can Take Ownership of Renewable Power|
For podcasts, videos, and more, see ILSR’s community renewable energy archive.
This article was originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter or get the Energy Democracy weekly update.
Featured photo credit: MPCA Photos via Flickr. (CC BY-NC 2.0)