The Promising Opportunity of Community Solar

The Illinois Power Agency (IPA) is moving quickly to launch the state’s Solar for All and Adjustable Block Programs. On September 14, IPA selected Elevate Energy as the Program Administrator for the Solar for All Program. Vendor registration for the Adjustable Block Program is expected to open on November 1, 2018. These programs introduce statewide opportunities to participate in community solar projects. Given this progress, it is worth examining the basics of community solar—and the role it can play in our clean energy future. To read more about specific programs in Illinois and other Midwest states, see my companion blog post, “State of the States: Community Solar in the Midwest.”

Community solar presents a promising opportunity to expand the utilization of renewable energy resources across the United States—and to ensure that often-marginalized communities have access to those resources and their associated benefits.

Community solar provides individuals and organizations who cannot accommodate their own rooftop solar panels an alternative means of contributing to the development of renewable solar power. There are several potential obstacles to the installation of private rooftop solar. The most basic are physical.

• Many roofs do not receive appropriate levels of direct sunlight.
• Others are in bad physical condition and cannot handle the installation of solar arrays.
• Residents of apartment complexes and condominiums typically cannot make decisions regarding the use of rooftop space.

There are also significant financial barriers to rooftop solar. A typical 4 kW household system costs approximately $16,400 to install. Leasing programs, power purchase agreements, and government rebates can help certain households avoid these up-front costs, but many of the same physical barriers—as well as additional financial obstacles for low-income citizens, including creditworthiness—remain relevant. Google’s Project Sunroof is a useful tool for estimating the solar (and savings) potential of your rooftop.

Given the existence of these obstacles, community solar projects help provide “equal access to the economic and environmental benefits of solar energy generation regardless of the physical attributes or ownership of a home or business.” Community solar enables customers to subscribe to a portion of the electricity generated by an off-site solar array, often owned by a third-party solar developer. Subscribers then receive a credit on their electric bills for the energy their subscription contributes to the grid. Depending on the program, utilities can also purchase the Renewable Energy Credits (RECs) associated with the electricity, thus creating another value stream for solar developers and project subscribers. 

It is widely recognized that low-income communities, communities of color, and environmental justice communities have long been excluded from participation in environmental initiatives and the clean energy economy (see, for example, “Latinos and Climate Change: Opinions, Impacts, and Responses” and “The State of Diversity in Environmental Organizations”)—and not because they disregard the health and economic impacts of climate change. Latinos in the United States, for example, “overwhelmingly demand climate action.” Community solar is one mechanism for expanding and diversifying the participants in the fight against climate change.

Community solar projects can also provide participants with important economic benefits. Specific economic considerations depend on the community solar program’s design and implementation. Popular mechanisms include on-bill crediting intended to reduce monthly electric bills and fixed-rate contracts designed to protect against rising electric rates and price volatility.

Community solar is expanding rapidly across the country. As of October of 2018, nineteen states and the District of Columbia have implemented laws or regulations enabling the employment of community solar in their territory. As a result of this trend, the Solar Energy Industry Association (SEIA) estimates that “the next several years will see the US community solar market add as much as 3 GW” of capacity—enough to power nearly half a million homes.

As community solar continues to spread across the country, so too will the coalition of citizens, organizations, and businesses participating in the development of renewable energy and the fight against climate change. To read about opportunities for participation in community solar in your state, see useful resources from the National Renewable Energy Laboratory and Solstice.