Can’t Have Solar on Your Own Roof?

Community Solar is About to Become Much More Common

- from a USA point of view

By Dan Gearino—Inside Climate News

ON A FARM field east of Faribault, Minnesota, a 1.3-megawatt solar array provides electricity to serve about 180 subscribers.

The project, which occupies about six acres, is an example of community solar—also called “shared solar” or “solar gardens”—a kind of development in which subscribers receive credits on their monthly utility bills for the solar electricity produced.

Community solar is poised to become much more common thanks to a new $7 billion fund tied to the Inflation Reduction Act. The EPA began the process of setting up the fund last week.

I’ve found that one of the biggest challenges in writing about community solar is explaining what it is, so I turned to Maria McCoy, a researcher for the Institute for Local Self-Reliance, a nonprofit that closely tracks the programs.

“Community solar is meant to be an option for folks who can’t put solar on their own roofs, whether they don’t own a home or have the financial ability to put solar up there or have a lot of shady trees,” she said.

The large majority of subscribers and projects are in six states: Colorado, Illinois, Massachusetts, Minnesota, New Jersey, and New York. About 20 states have active programs and many of the rest have rules that limit the ability of developers to do subscription-based projects.

Community solar has its origins in ideas about democratizing access to clean energy, which has translated into laws mostly in blue states.

McCoy, whose organization’s main office is in Minneapolis, has an up-close view of one of the largest and oldest community solar programs in the country, which exists in the territory of Xcel Energy, Minnesota’s largest utility.

The program, started in 2014, has nearly 30,000 subscribers across the state who have signed up to participate in one of about 850 solar projects.

Faribault Community Solar went online in 2019, developed by Cooperative Energy Futures, a Minneapolis-based nonprofit that builds projects to serve low- and moderate-income households. The city of Faribault is about 50 miles south of Minneapolis.

Customers get a monthly bill credit from Xcel, and the savings is one of the main selling points for subscribing.

This model is designed to encourage development of solar power while also providing savings.

While you might imagine electrons flowing from the solar projects to their subscribers, it doesn’t work that way. For nearly all community solar projects (and utility-scale solar and wind), the electricity goes into the grid for use by anyone, and the subscriptions and credits are a matter of bookkeeping.

The Xcel program’s successes and growing pains have served as lessons for other states. One of the biggest criticisms of the program has been that it doesn’t do enough to provide benefits to low-income households.

Minnesota is no longer the national leader in community solar, at least as measured by the number of projects or the generating capacity of those projects. That title belongs to New York after substantial growth in 2022. The New York program has gained momentum thanks to initiatives by the state government and the nonprofit sector, including some that focus on giving low-income households access to solar.

The state had 728 projects online as of the end of the third quarter of 2022, according to the Institute for Local Self-Reliance.

One example is a 1.2-megawatt project in Brooklyn built across 40 New York Housing Authority Rooftops. The project serves about 500 low- and moderate-income households, although most community solar projects do not focus exclusively on low-income communities.

Several states are in the early stages of setting up community solar programs. The one I’m watching most closely is California, which revised its rules for the programs with a new law in 2022. California leads the country in rooftop solar and utility-scale solar, and should have a large market for community solar now that it has rules in place to encourage the projects.

Some states have programs that they describe as community solar, but which clean energy advocates say are utility-controlled efforts that only mimic some attributes of community solar. A good example is Florida Power & Light’s SolarTogether program, which one group, Solar United Neighbors, says is “fake community solar” because consumers pay a premium to participate and don’t receive any bill savings while the utility is able to earn a guaranteed profit by building the systems and charging customers for the electricity. (When I said that about 20 states have community solar, I wasn’t including Florida.)

◄ 1.2-megawatt project in Brooklyn built across 40 New York Housing Authority Rooftops.

The federal government now has $7 billion that can go to community solar through the Greenhouse Gas Reduction Fund, which was created by the Inflation Reduction Act signed by President Joe Biden in August.

The EPA has said the fund will award up to 60 grants and that it “will prioritize delivering financial and technical assistance to projects that deploy residential and community solar, associated storage technologies, and related upgrades.”

McCoy expects that the states that already have community solar programs will be best equipped to benefit from the fund. The applicants can include states, cities, and Tribal governments, among others. If they are successful in getting grants, the next step likely would be to work with a developer to build a project or projects.

The grants have the potential to substantially increase access to community solar. For perspective, developers spent about $1.3 billion on U.S. community solar projects in 2022, according to the research firm Wood Mackenzie.

The firm issued a forecast last week showing that the community solar market will double by 2027, with an additional 6 gigawatts of solar capacity coming online (the report was done in collaboration with the Coalition for Community Solar Access, a group that includes solar companies and clean energy nonprofits).

That’s a lot of new capacity, but it would be just the start of what’s needed if community solar is going to become a major part of the transition to clean energy.

This article originally appeared on Inside Climate News https://www.fastcompany.com/90856150/ community-solar-funding-inflation-reduction-act