By: DSIRE Insight Team
Community solar has emerged as a popular policy option for states aiming to expand access to solar energy. Community solar programs allow customers to purchase solar-generated electricity from off-site solar facilities through subscriptions or upfront payments, giving people who cannot or prefer not to install rooftop solar a way to participate in the solar economy. Community solar subscriptions involve payments for electricity from specific facilities, which are typically located in the same local jurisdiction as the subscribers; as such, they can be differentiated from programs like green tariffs, which allow customers to buy renewable electricity but usually do not identify specific facilities and have looser location requirements.
As community solar has grown as a segment of the solar market, state policymakers have taken interest, and several states have made community solar an important part of their overall solar policy framework. As of February 2021, 23 states and the District of Columbia have statewide policies enabling at least some form of community solar, and many other states have authorized specific community solar programs proposed by utilities. This post highlights some trends in community solar policy that have emerged recently as community solar has become a major part of the solar landscape.
State Community Solar Policies (February 2021)
Low-Income and Multifamily Access
State policymakers, throughout 2020 as well as in the early part of 2021, have shown an interest in modifying community solar programs to make them more accessible and advantageous to lower-income households and people living in multifamily dwellings. For example, in July 2020 Colorado’s Public Utilities Commission approved new rules for the state’s Community Solar Gardens program. The new rules expand access to the program for operators of affordable housing, facilitate donations of bill credits to lower-income customers, and remove limitations requiring subscribers to live in the same or adjacent counties to their community solar facility.
New York’s Public Service Commission approved a proposal from the New York State Energy Research and Development Authority (NYSERDA) to create a Framework for Solar Energy Equity, which will direct additional funding from the NY-SUN program to projects that benefit lower-income people and communities. Virginia lawmakers passed legislation creating new shared solar programs for Dominion Energy, the state’s largest investor-owned utility. One of these programs includes a 30% program carve-out for lower-income customers, and another specifically enables shared solar programs for multifamily dwellings.
So far in 2021, Illinois legislators have proposed numerous policy changes involving community solar as part of the Clean Jobs, Workforce, and Contractor Equity Act. This bill directs state programs which procure renewable energy credits from community solar projects to ensure that lower-income people have access to job opportunities in the construction of the projects. The bill also reserves some funds for support of community solar projects that are at least partially owned by lower-income residents, affordable housing owners, or organizations providing community services. Overall the bill has an emphasis on encouraging community ownership and governance of community solar facilities, which stands in contrast with the utility-led community solar model that has become prevalent in many states.
New Program Models
States have also been considering new programs that differ from the traditional community solar model, but that share the overall goal of providing wider access to the economic benefits of solar energy. New York in particular has been a hotbed for new program models. New York recently adopted a new program which, though not a community solar program by the traditional definition, offers a new model for sharing the benefits of solar more broadly. The Host Community Benefit program will require developers of large solar (and wind) projects to provide payments to residents of municipalities where the projects are located. The payments will be made through electric utilities and will be distributed on residents’ electric bills.
Also in New York, two municipalities are preparing to launch a pilot “opt-out” community solar program in collaboration with Joule Community Power, an independent power provider active in the Community Choice Aggregation market. This program, referred to as Community Choice Solar, avoids many of the traditional participation barriers for community solar programs by automatically enrolling residents in the program, with an option to leave. The program was approved by the New York Department of Public Service in September 2020.
Utility-Led Programs
Community solar has made an impact even in states without formal community solar policy. Utilities in some states have chosen to offer community solar programs without a legislative mandate to do so. Florida Power & Light’s SolarTogether program is an example of this approach. Through this program, approved by state regulators in 2020, Florida Power & Light is building 1.49 GW of solar capacity and offering it to customers through subscriptions. The program requires an upfront payment as well as monthly subscription payments, and provides monthly bill credits based on the value of the solar generation. Unlike many other utility-led programs, SolarTogether is projected to eventually provide a net bill reduction for subscribers, rather than requiring a perpetual “premium” for solar electricity. The first six solar plants to enter service through SolarTogether have already been fully subscribed; additional facilities are scheduled to begin operation in 2021.
Many municipal utilities and electric cooperatives have also created community solar programs in states without formal requirements. In North Carolina, a legislatively-mandated community solar program for the investor-owned Duke Energy utilities has yet to begin, but Fayetteville Public Works Commission (a municipal utility) and several members of the North Carolina Electric Membership Corporation already have community solar programs up and running. The Fayetteville program, like the SolarTogether program in Florida, expects to be able to provide subscribers with a net bill reduction over time.
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Learn more about community solar policy changes under consideration with the 50 States of Solar quarterly reports, or DSIRE Insight’s Solar Single-Tech Subscription service. Contact us for more information or to request subscription samples.