The solar industry is growing at an unprecedented rate throughout the U.S. By the end of 2015, the Solar Energy Industries Association predicts there will be enough solar power capacity installed to power more than 5.8 million homes.
Municipal utilities are realizing the benefit of offering their customers the option to use solar energy. Traditional solar can be costly, however, especially for utilities that explore building a solar facility on their own. Now there’s an easier, cost-effective option for utilities interested in providing clean energy for their customers — community solar.
Community solar, also known as a “solar garden” or “solar farm,” enables utility customers to buy or lease panels in a centralized solar array, or subscribe to a portion of the clean power — and receive credits on their electric bills. With community solar ownership, customers buy individual panels and utilize incentives and tax credits as if the system were located on their property.
The ideal community solar program for utilities
The most attractive solar programs for municipal utilities are the ones that provide the greatest customer value. Risk aversion is another highly desired attribute when considering community solar: A program with past successes and proven expertise can reduce a utility’s potential liability and eliminate the need for an upfront capital investment. Many municipal utilities also seek the lowest-cost method of offering solar to their customers.
Community solar with Clean Energy Collective
One of the nation’s leading providers of community solar for utilities, Clean Energy Collective, locates, funds and constructs centralized community solar facilities that are interconnected to the utility’s grid at an ideal location. The energy generated flows directly to the utility under a mutually agreed contract, such as a power purchase agreement or feed-in tariff, and is controlled by the utility. Customers in the utility’s service territory may then purchase solar photovoltaic panels directly from CEC and offset their electric bills.
To develop a community solar program, one must make a significant capital investment to procure the equipment — the solar electric panels, racking, construction labor, etc. The other consideration when putting together a community solar project is the program infrastructure: the customized power purchase agreement; operations and maintenance; customer contracts; legal efforts; compliance with federal and state laws, such as Securities Exchange Commission and Internal Revenue Service regulations; and the automated billing system integration. These elements add up quickly and are often the most overlooked. Some utilities will spend hundreds of thousands of dollars on billing integration software alone.
Even if a utility decides to make the investment, it is often faced with excessive maintenance costs over the solar facility’s lifetime and must carry all of the associated risks. In fact, for a 1 megawatt community solar project, operations and maintenance costs are expected to exceed $1.8 million over 50 years.
Partnership with Fort Collins Utilities
Nationally recognized for its sustainability leadership, Fort Collins Utilities, Fort Collins, Colo., serves a city of roughly 155,000 residents with 68,000 electric meters.
“We’re now in an era that is more supportive of solar, where marketplace factors are aligning to make it more attractive to the average customer,” Senior Energy Services Engineer Norm Weaver said.
While some utilities have pursued building their own community solar facilities, Fort Collins Utilities explored its options and determined the “do it yourself” model was not ideal for its purposes. “We wanted to respond to the local interest but did not necessarily want to get into that business,” Weaver said. After weighing the risks and rewards of the various options, it decided to engage with a commercial vendor to build a community solar facility.
The Fort Collins Community Solar Array, the first project collaboration between Fort Collins Utilities and CEC, is a 620-kilowatt facility that will break ground in early 2015.
“The initial stage was strongly reserved,” Weaver revealed.
To date, Fort Collins Utilities has an estimated 2,500 kW of solar capacity installed. “We expect that number to be more like 6,000 kW in a year or so, with the various commercial projects that are online and the completion of the solar garden,” Weaver said. “It’s been an increasing trend year after year.”
A proven solution to overcome cost barriers
As validated by the National Renewable Energy Laboratory, the Department of Energy and the Institute of Local Self Reliance, CEC’s program is one of the most widely replicable programs. With a self-proclaimed 100 percent success rate, CEC’s community solar programs are being discussed with more than 160 utilities nationwide. Across all of these successes, CEC places heavy focus on the best possible pricing for every aspect of the community solar solution.
In December CEC partnered with First Solar, giving the community solar developer access to the same equipment pricing as some of the largest solar installation companies in the world. CEC now has the ability to deliver the costly infrastructure elements to its utility partners at no additional cost to the utility.
With little to no capital costs to its utility partners, no membership fees and a warranty that lasts between 20 and 50 years, CEC’s innovative community solar solution is recognized as one of the nation’s most affordable programs for utilities.
This article was written by Clean Energy Collective. Considering community solar for your utility? CEC may be able to help. For more information visit www.easycleanenergy.com or call (720) 360-3000.