Groups of solar-savvy Americans are finding ways to buy into a solar electric system by using power-purchase agreements, remote metering and other tools to supply power to a community organization. In a growing number of cases where these systems produce more power than the facility needs, they can earn a credit the net additional amount against their home electricity bills.
A variety of business models are emerging with many unique to laws in their states. What makes sense in a few states is providing lessons learned to clean energy entrepreneurs who are educating their lawmakers in other states. The result: owners save money, electricity displaces fossil-fueled generation supplied by the regional grid and a modest number of new permanent jobs join the local economy.
Here are approaches underway in certain states led by visionary entrepreneurs:
Clean Energy Collective in Carbondale designs and installs solar electric systems local residents can own together. As a for-profit entity, it qualifies for tax incentives and rebates in what has been a very green-minded state. Remote metering — a key cog in this business model — enables subscribing residents to also earn monthly credits on their home power bills.
The Collective’s ground-breaking project is a 77.7 kilowatt solar electric system in El Jebel (see photo). Area residents were so enthused — and educated — about it that subscriptions sold out within a few weeks. On June 14, the Collective is set to cut the ribbon on its second, and much larger, project: a 1.5 megawatt system near an airport in Garfield County, CO.
A new Community Solar Gardens Act signed into law in 2010 by then Governor Bill Ritter enables groups of at least 10 subscribers of an investor-owned utility to collectively a solar electric system and benefit from incentives. The state Public Service Commission is expected to issue rules for developing these systems this summer.
The Massachusetts Green Energy Act set the stage My Generation Energy, a for-profit company in South Dennis, to design and build solar electric systems with residents of Brewster and Falmouth on Cape Cod. In each case, residents have formed a limited liability corporation (LLC). The Brewster project is due to be generating electricity by December 2011. Scroll down for a schematic of the company’s model.
University Park Community Solar. This bedroom community near the University of Maryland in neighboring College Park is home of 35 forward-thinking residents who formed an LLC to develop and own a 22 kilowatt solar PV array atop the Church of the Brethren in University Park. Grants they earned from Maryland, the Federal Investment Tax Credit, Solar Renewable Energy Credits and a upgraded net metering law are expected recoup the subscribers’ within six years while paying an 8% return over 20 years.
Each of these projects is significant step beyond what several utilities offer to ratepayers. Some utility programs enable ratepayers to buy “units” of solar power production or lease the output from one or more panels. The results are mixed as these two examples illustrate:
The Sacramento Municipal Utility District has had its “SolarShares” program since 2007. It allows subscribers to source a maximum 40% of their energy from a 1 megawatt solar array on a local turkey farm. Subscribers pay a monthly fee commensurate with the shares they’ve purchased through a form of power purchase agreement. The monthly fees range between $10 and $127 according to Home Power magazine, which has an excellent tally of other community solar projects in its June-July issue. The average customer pays an extra $12 per month.
The Florida Keys Electric Cooperative is trying to enlist customers to lease, for 25 years, photovoltaic (PV) modules @ $999 at its solar array in Marathon. Customers receive monthly credits on their bills for the full retail value of the power produced. The rough economy is no-doubt hampering the popularity of this program with only a handful of customers signing up since its launch in early 2010.