You may be hearing more about community solar these days. Unlike the more common ‘behind the meter’ solar, where you put solar panels on your roof or on your own land, community solar allows you to effectively purchase solar energy from panels that are not on your property or owned by you. These fields of solar panels work to generate renewable electricity that feeds into the utility grid.
How Community Solar Works
Subscribers, or members, of a community solar project sign up to take a portion of the electricity generated from the solar panels. A combination of businesses and residents can buy energy to offset what they are using at their facility or home. The utility will then recognize each subscriber as providing renewable energy to the grid and will issue energy credits on the subscriber’s utility bill.
New York Incentives are Sizzling
Community solar is particularly attractive in New York state right now, with beneficial incentives getting passed through to customers. For example, some solar developers have been able to provide up to a 10% guaranteed credit on the utility bill. They have been able to do this based on the so-called VDER rate (the value of the distributed resource), which has been set by New York with certainty that is allowing projects to deliver attractive discounts to subscribers, while at the same time allowing developers to finance their projects. Developers are either setting up a structure where the subscribers are collecting the utility credits on their bills and passing 90% of the credits back to the developer, or the developer takes on the utility billing for the subscriber and provides the credits.
What to be Aware of
In order to participate in community solar, your state needs to have a program in place that allows “virtual net metering”. Virtual net metering provides you with credits on your utility bill for the grid connected solar you receive through a community solar project.
If you are considering community solar, it’s important to make sure that your utility bill is large enough to offset the credits you may receive by participating. The credits can only be applied to your utility bill, not a separate supplier bill. Companies can consider consolidating the supplier charges on their utility bill, but it’s important to note that not all suppliers and utilities will provide consolidated billing. Check with your Usource advisor to help better understand any billing implications you may have. State rules may allow credits to be re-allocated among multiple sites in the same electric utility load zones.
In cases where you are looking to claim the value of the environmental attributes of community solar, it is important to understand where the actual environmental value is going. For example, in New York, the official environmental value of community solar goes to the utility. The utility is using the environmental attributes to meet its renewable standards on its system. Because of this, you will not be able to claim the environmental attribute, but rather only receive the energy credit on the bill. If part of your goal is to be able to make the environmental claim, you may want to consider Renewable Energy Credits (RECs).
We strongly encourage you to contact your Usource advisor if you are considering solar, either traditionally on your property, or through a community solar project. Usource can help you evaluate the economics and advise you on the key factors to look for so you avoid potential pitfalls. We can also help you source the best solar solution for your facilities. Give us a call today.