NewEnergyNews: TODAY’S STUDY: HOW COMMUNITY SOLAR CAN BE DESIGNED

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge now: To make every day Earth Day.

YESTERDAY

THINGS-TO-THINK-ABOUT THURSDAY, December 1:

  • TTTA Thursday-First Daughter Ivanka May Fight For Climate
  • TTTA Thursday-Low Profile High Power Ocean Wind Energy
  • TTTA Thursday-A Visionary Solar Power Plant
  • TTTA Thursday-EVs Have A Growth Path
  • THE DAY BEFORE

  • ORIGINAL REPORTING: How The Clean Power Plan Drove The Utility Power Mix Transition
  • ORIGINAL REPORTING: How Utilities Are Answering The Distributed Energy Resources Challenge
  • ORIGINAL REPORTING: Looking At New Rates To Unlock The Utility Of The Future
  • THE DAY BEFORE THE DAY BEFORE

  • TODAY’S STUDY: The Power Potential Of Personal Wind
  • QUICK NEWS, November 29: Climate Change Forces Hard Choices In Alaska; New Energy To Utilities-“Can’t-Beat-Us-So-Join-Us”; Fact-Checking Trump Hot Air On Wind
  • THE DAY BEFORE THAT

  • TODAY’S STUDY: Getting More New Energy On The Grid
  • QUICK NEWS, November 28, 2016: Pope Talks Climate Change At Trump; Solar Comes To The Mall; The Big Possibilities Of Backyard Wind
  • AND THE DAY BEFORE THAT

  • Weekend Video: Why President Trump Can’t Stop New Energy
  • Weekend Video: 7 Things Climate Change Will Mean
  • Weekend Video: Wireless EV Charging Stations
  • THE LAST DAY UP HERE

  • FRIDAY WORLD HEADLINE-A Picture Of Climate Change
  • FRIDAY WORLD HEADLINE-Japan’s Toyota Targets Longer Range EV
  • FRIDAY WORLD HEADLINE-Spain’s Bay of Biscay Wave Harvest
  • FRIDAY WORLD HEADLINE-Morocco’s Green Revolution
  • --------------------------

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    Anne B. Butterfield of Daily Camera and Huffington Post, f is an occasional contributor to NewEnergyNews

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    Some of Anne's contributions:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • FRIDAY WORLD, December 2:

  • Aussie Farmers Worrying About Climate Change
  • The Climate Change Solution At Hand, Part 1
  • The Climate Change Solution At Hand, Part 2
  • New Energy And Historic Buildings In Europe

    Tuesday, December 08, 2015

    TODAY’S STUDY: HOW COMMUNITY SOLAR CAN BE DESIGNED

    Community Solar Program Design Models

    December 2015 (Solar Electric Power Association and SolarMarket Pathways)

    Executive Summary

    Solar Electric Power Association considers utility-involved community solar a business model with three defining elements:

    a group of participants voluntarily pay for a share of a solar array that is located external to their properties;

    the electricity produced flows into the electric grid; and

    the subscribers receive benefits for the electricity produced by their share of the solar array.

    The value of community solar programs to a utility’s customers is significant. Through utility-involved community solar, customers who are interested in renewable ownership, but lack rooftops ideally suited for rooftop photovoltaic (PV) solar, are able not only to participate but also to benefit from the economies of scale, with no maintenance associated with an offsite solar build. From the utility perspective, community solar helps improve a utility’s relationships with customers and gives the utility more control over new distributed generation projects.

    In this report, funded by the U.S. Department of Energy via the Solar Market Pathways grant, SEPA aims to improve the public understanding of what community solar design models currently exist. This report breaks down program design into 12 key decisions and provides discussion as to what options are most prevalent, and their resulting consequences. In addition, the report provides insight into subscription rates, development times, and administrative costs of current programs.

    This report is the first step in a larger process that has the overall goal of increasing the prevalence of community solar. The next two steps in this process are to conduct market research to identify what customers want in a community solar program, and then to work with individual utilities to help structure new community solar programs that best meet the utilities’ and their customers’ needs…Sunshot funding to Spark growth…

    Community Solar Basics

    In this report, SEPA uses the term community solar program (CSP) to describe a specific business model. SEPA uses the term community solar garden (CSG) to describe a single solar array used in the program. An individual CSP will be located in one utility’s service territory and will have consistent terms and conditions, but may involve multiple CSGs. SEPA considers all CSPs to share three defining transactions as depicted in Figure 1. First, a group of participants voluntarily pay for a subscription (or direct ownership) of a portion of a CSG that is located off-site. Second, the electricity produced by the CSG flows directly into the grid. Third, in exchange for their subscription, the participants receive an agreed upon compensation (e.g., an on-bill credit) for the electric production of their portion of the solar CSG. CSPs can be led directly and entirely by the utility, led by the utility in partnership with a third party serving a specific role (e.g., project developer, customer interface), or even led by a third party.

    When the first CSPs (also commonly referred to as “solar farms” or “shared solar”) were completed in 2006, they offered participants an opportunity to access solar output without the need to install panels on their homes and businesses. These innovative projects provided solar access to all customers, and in particular those customers who did not own their property, or had roofs that were shaded, were not appropriately oriented for solar collection, were in less than optimal locations for solar panels, or simply for those customers interested in solar but who chose not to host a system on their property. In addition, because of economies of scale, community solar projects provide the opportunity to realize lower installation and maintenance costs, and higher energy production per kilowatt (kW) as compared to individual installations.

    These project encompass a wide 68 active CSPs (Figure 2), with many more being planned (the full list of active programs is provided in Appendix A). There are a wide variety of program designs that have experienced varying rates of customer subscription. Research into which design elements and models have worked best will lead to more consistency in CSP design and increased clarity for market participants, and thus easier replicability and improved adoption.

    Community solar programs are pursued for a variety of reasons, the most common being as a response to customer demand for more solar options. In addition, many utilities pursue these programs to gain experience in the distributed solar market and to have greater control over the location of distributed solar projects. Another large driver of community solar development is state policy or regulatory direction. As of the time of this report, 13 states plus the District of Columbia have enacted community solar legislation (Figure 3). Each policy varies, particularly in scale and reimbursement rate, but the foundation for each is the enablement of bill crediting for customers participating in community solar programs. These policies, as depicted in Figure 3, have been highly influential in generating community solar programs…

    Community Solar Program Design

    Most readers are interested in how to design a community solar program that meets objectives, responds to local or regional desires, and delivers successful results for all stakeholders. This section presents our method to design a successful program based on an understanding and comparison of existing programs across the nation.

    Each community solar program is designed differently, making it a challenge to compare success across programs on an apples-to-apples basis. To create a methodology to define success, SEPA suggests considering whether three criteria are met. They are:

    • Is the program fully subscribed?

    • Does the program return value to all rate-payers in an economically balanced and equitable manner?

    • Are subscribers satisfied with the program? Based on this evaluation, community solar programs experience highly varying levels of success. For example, the Orlando Utilities Commission(OUC) has, what many consider to be one of the most successful programs.

    Launched in 2012, OUC was able to fully subscribe its 400 kilowatt (kW) program in under a week.

    Based on continued demand and positive feedback – there was more than 1 MW of demand on the waiting list in the summer of 2015 – they are currently in the process of expanding their program. In contrast, Florida Keys Electric Cooperative’s (FKEC’s) Simple Solar program, launched in 2010, struggled in its early stages to get participation, and had less than 10% of the available panels leased as late as 2014.

    So the big question is, of the two programs based in Florida why did OUC succeed while FKEC struggled? Though many factors are at play, including the widely different economic conditions in 2010 versus 2012, SEPA has identified a four-step process for program design, which can help utilities ensure the best chance of community solar program success.

    Four steps:

    1- Identify clear program goals and conduct due diligence on your local market to ascertain whether these goals are feasible…

    2- Select design options for the community solar program…

    3- Identify marketing plan…

    4- Monitor program satisfaction…

    Design Decisions

    The administrators need to consider at least 12 design decisions when crafting their community solar program. It bears noting that none of these design decisions is made in a vacuum, and they all affect one another. The key design decisions along with the common options used in existing CSPs are summarized in Figure 8…

    Economic Design Decisions…Customer offer: Economic proposition: Sign-up Fee: Renewable Energy Credit Treatment…Site and Scale: Participation Limits…

    Program Flexibility Decisions...Production Guarantee…Minimum Term…Program Length…Subscription Transfers…Unsubscribed Energy…

    Early Community Solar Program Models

    As of August 2015, SEPA was tracking 68 active CSPs across the country, with more announced seemingly every week. The specifics of individual program designs vary, and no standard, off-the-shelf designs exist that can be quickly and confidently replicated.7

    However, SEPA categorizes all CSPs into two general design categories: they are either utility-led or third party-led. Each of these general categories has at least two subcategories as depicted in Figure 9.

    These categories are not meant to be the final word on CSP design structures, but instead simply a method to improve conversation around the types of programs. Simply put, they are a classification of what is, not a decree of what should be. It is likely, as designs evolve, that additional program variations will emerge and SEPA will update these categories. Though the specifics of program designs within each category vary, there are some general consistencies across each bucket which are discussed below.

    Utility-Led “Pilot Program”

    Pilot programs are a first-step CSP model, driven by the desire to provide solar ownership to the utility’s most environmentally conscientious customers while at the same time providing the utility with experience operating a solar program. These programs are most common in smaller utilities, often cooperatives or public power utiliies, and utilities with little experience in solar generation. Because the programs are designed to satisfy the demand of select customers, they are typically small in scale — under 500kW — and are able to have an upfront payment. Some utilities pursuing this model contract specific support services, such as billing or operations and maintenance (O&M), out to third parties.

    Utility-Led “Second Generation Program”

    Recently, utilities have shifted focus from satisfying the needs of select customers to bringing the opportunity of solar ownership to the entire breadth of their customer base and making distributed energy resources part of the smart grid story. The programs that have resulted are larger in scale, with some programs more than 20 MW. So that the program is not financially cumbersome and accessible to customers from all economic backgrounds, these programs provide customers the option to spread out their payments either through attractive financing or per kWh, ongoing payment options. In addition, some utilities have begun to add companion measures, such as storage, to their CSGs, in order to enhance the programs’ overall value to the grid. Again, some utilities pursuing this model may contract with third parties for specific support services, such as billing and O&M.

    Third Party-Led “For Profit Program”

    In the late 2000s, private companies entered the community solar market. The companies — three of which (Clean Energy Collective, Recurrent Energy, and Sunshare) are on our working group — partner with utilities to develop, manage and maintain community solar programs. Private company-led programs have proliferated most rapidly in states with shared solar policies. Because they are profit driven, these programs are designed to maximize participation, thus the CSGs are usually large, often greater than 1 MW, and multiple pricing options are provided to appeal to the broadest audience. These companies often provide their services to utility-led programs as well, though this is a separate classification.

    Third Party-Led “Nonprofit Program”

    Though less common, some CSPS are led by nonprofit organizations. Some nonprofits are formed specifically to manage a specific community solar program and are wholly owned by subscribers to the program; some are mission based organizations that are supported by donations. These programs are notable in that they have had early success in developing CSP models that involve low-income subscribers.

    Survey…Subscription rates…Generating Capacities…Future Expansions…How long does it take to develop…Major costs…

    Next Steps

    …This report is the completion of the first work stream, which involved researching existing CSPs and identifying design trends and standard design models. The next steps for this project are to conduct customer research to determine potential subscriber preferences, and to assist utilities with design and implementation of new CSPs… In August of 2015, SEPA and the Shelton Group kicked off the second work stream by conducting focus group sessions with home owners, renters, and small business owners in four markets: New Jersey, Colorado, Illinois, and Georgia. Though the full focus group report will not be released until 2016, a few interesting findings can be mentioned at this point:

    • Economics are No. 1 – Customers said that they would only participate if there was a clear economic case for them. The voice of the advocate who puts “being green” above all else was nonexistent.

    • Greater effort is needed to educate the public – Very few focus group participants knew what community solar was prior to the meeting. This was not due to screening. As the business model was explained, preferences shifted quickly from doubt to interest.

    • Length of commitment must be short – Customers were not interested in making a long-term contractual commitment. They gravitated toward the models that had shorter terms, provided transferability of subscriptions, or gave flexibility to drop out. Note that the design option for program length, which is typically 20-25 years, is not a customer commitment, but instead a length of time that benefits can be received.

    • Location is important, but in an unexpected way – There was consensus that customers did not want to see the solar panels and would prefer them to be sited at remote locations. One residential focus group participant likened solar panels to other utility equipment such as substations, which were seen as unattractive, as a reason for preferring remotely located projects to those within their community…

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