Friday, November 13, 2015

The Big Picture - A Grand Vision for Community Solar

Imagine a world where everyone owns their own solar panels. Whether from rooftop panels or a nearby solar garden shared with neighbors, each person will have clean, locally produced electricity as a birthright. With each solar garden the centerpiece of a community microgrid, power supply can be resilient to extreme weather, becoming an “island” of power when needed. Money for electricity stays local, building vibrant community wealth. The electric grid and utilities are re-engineered, managing a bidirectional flow of power from where the sun shines and wind blows to wherever it is needed most, dynamically changing with conditions. Batteries, both stationary and in smart-charging vehicles, provide support at night and when the sun goes behind a cloud. This is the distributed energy vision, which addresses both the problems of climate change and economic inequality. has supported the distributed energy vision since early 2010, a time when the centralized energy paradigm was dominant. The plan on the table was for huge solar and wind power plants to be built in remote areas, with a web of new transmission lines bringing renewable power to the cities. While “big solar” remains a big part of the picture, distributed energy has gained traction in recent years in particular because of the rapid reduction in solar PV prices.

Community and shared solar systems have expanded rapidly in the United States and several other countries. The openings of solar gardens programs in Colorado and Minnesota have lead to mini “gold rushes” as companies compete for opportunities, sometimes even bidding the price for renewable energy credits down to negative levels. New programs are getting started in California and New York, while Maryland and Hawaii join a dozen or so states with legislation supporting shared solar. More utilities including municipal, cooperative, and investor-owned have stepped up to the plate with voluntary programs. Because solar gardens have something to offer customers, developers, and utilities alike, the community solar sector has become the fastest growing of the U.S. solar industry, expected to grow to 5000 megawatts or more by 2020. In a recent paper, the Department of Energy estimates that shared solar could make up 32% to 49% of the distributed PV market in 2020. Given the increasing share of solar in the renewables market, shared solar will become an important part of a climate solution.

The federal government has been active as well in promoting shared solar. The Department of Energy’s SunShot initiative issued $15 million in grants to encourage development in the sector. The White House announced the National Community Solar Partnership, bringing together government, developers, nonprofits, and industry groups while establishing funding for projects supplying affordable housing. The National Renewable Energy Laboratory has continued to support the industry with research and how-to guides.

Policy Changes

The potential for the 30% Investment Tax Credit (ITC) to expire at the end of 2016 is roiling the U.S. solar industry. While the credit was an engine that drove the solar industry’s growth, substantial transaction costs associated with tax equity make it an inefficient way to fund projects, particularly the modest-sized arrays typical of community solar. The silver lining of an ITC expiration would be the simplification of the business structures needed to operate a community solar garden. Nonprofits and cooperatives could manage shared solar systems and take advantage of state and federal securities law exemptions. In the meantime, recent IRS rulings will allow community solar subscribers to claim the tax credits for their ownership stake. Business models and software can be made available to community groups as “open source”.

In the international realm, cooperatively owned solar power is commonplace in countries such as Great Britain and Australia, while unheard of in other countries, including China. With increased cooperation between China and the United States in the prelude to the Paris climate talks, Asia’s dense cities represent a huge potential market for offsite solar PV. In the developing world, community microgrids for rural electrification are offering opportunities to thousands.

Encompassing All Technologies

Community ownership models can be applied to assets other than solar panels, such as wind or other renewables, energy storage, or microgrids. Battery storage news has been dominated in recent months by Tesla’s PowerWall, using lithium-ion technology similar to electric car batteries. This has not, however, stopped the continuing drumbeat of innovation in this field, including metal air, flow, and organic batteries. The jury is still out on what will be the dominant chemistry long-term, but with so many technological avenues to explore a cost-effective leader should emerge. Ways for owners to monetize the benefits of batteries to the grid at large must be found.

Microgrids promise local, renewable energy that can be reliably produced even if the larger grid goes down. By being able to operate independently, a microgrid can operate as both a load center and a virtual power plant dependent on supply and demand conditions. It can deploy generation, storage, and demand management to make its supply or demand predictable an hour or more into the future, a boon for utilities that must schedule power purchases. The microgrid business has been rapidly growing, with particular interest from areas that have recently experienced extreme weather events.

Working With the Land, Anticipating the Future Grid

It’s important to select good host sites that support the grid, are built environmentally responsibly, and are ready for potential developments such as microgrids including vehicle charging and stationary storage. Utilities can direct solar development to areas where it will minimize grid congestion and infrastructure costs. Because solar energy production takes up a lot of space, it’s important to focus on sites with multiple uses, such as crops or grazing (“agrivoltaics”), parking lots, or rooftops. Solar arrays may also be located in sites where land use requires a buffer, such as airports, water treatment plants, or roadsides. It would be useful to include a solar garden on each feeder, with participants on the same line, to reduce transmission losses and potentially support conversion to a microgrid. Having a solar garden in the same community as participants fosters a sense of local ownership and keeps money local - that’s why we call it community solar.

Excitement around community solar is growing, and solar gardens are sprouting up everywhere! Each project has a passionate champion, a “solar gardener” who is part project manager, part community organizer. Solar gardeners are building a grassroots movement to keep energy and money local while protecting the climate, air, and water. Maybe that’s you, or maybe you’d like to get started… Let’s do it!

Recently, I took some time to travel to China and learn about the potential for the international market. Given the exciting community solar environment today, I am restarting the Solar Gardens blog. The format will be a bit different, including a weekly post on an interesting topic in community solar, and a weekly news round-up. I hope to improve, finding new ways to provide value and new partners to work with to better serve the community solar community. Let’s work together to make this grand vision possible.

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