The concept of Smart Cities offers the promise of urban hubs leveraging connected technologies to become increasingly prosperous, safe, healthy, resilient, and clean. What may not be obvious in achieving these objectives is that many already-existing utility assets can serve as the foundation for a Smart City transition. The following is a broad discussion on the areas of overlap between utilities and smart cities, highlighting working knowledge from experience at PG&E.
The Transformative Potential of Community Solar
America is following the sun. Last year, the U.S. welcomed a new megawatt of solar capacity every 36 minutes, which created 1 out of every 50 new American jobs. Solar energy is abundant, affordable, and clean – and it’s growing. Thanks to community solar, it could also become a transformative way to share power, welcoming low-income communities to the economic opportunities of clean, distributed energy.
While rooftop solar has become a familiar part of the solar sector’s growth, it’s not accessible to half of the country. If you don’t own your own roof, don’t have good sun exposure, or don’t have good credit, it’s not an option. From an industry perspective, that means that the solar sector is missing out on at least half of its potential customers.
How it Works
Community solar enables anyone who pays a utility bill to purchase their power from a centrally located solar array. For community solar to be available as a clean energy option, enabling utility policies including virtual net metering need to be in place. In addition to state-level enabling policies, many local utilities including a growing number of rural electric co-ops offer community solar programs to their customers.
A New Market
While the community solar market is still in its early stages, the National Renewable Energy Lab (NREL) projects that it could grow to represent up to 49% of all distributed solar generation in America by 2020. To date, 15 states and the District of Columbia have enacted specific enabling policies that are in various stages of implementation, and there are about 100 projects totaling about 100 megawatts in place across the country.
The Call to Lead
The nascence of the market means that we have a ripe opportunity to design programs and projects that fulfill community solar’s potential to expand economic access to clean energy to people and communities who have not had a seat at the table until now – and to expand the market in the process. Early innovation focused on economic access and equity can scale with the market as it grows instead of being tacked on or mandated later at significant cost. If we miss the moment and continue with business as usual – replicating the economic and financial obstacles of rooftop solar in how we site, structure, and operate community solar projects – we won’t realize the full economic and social benefits of distributed solar energy.
Shifting the Adoption Curve
Look at it this way – solar energy is a new technology, and as such will tend to follow a typical technology adoption curve. First embraced by early adopters who can afford to buy the latest greatest, new technologies become more affordable over time and market adoption grows. Energy, however, is a necessity, not a luxury; and the poorest 20% of the country pays the highest electricity bills – 10% or more of their total household income. So the question we have to ask ourselves as market leaders and innovators is how can we deploy accessible solar energy solutions that open up market participation to a greater economic diversity of people?
Built to Share Power
It’s a thrilling product design challenge as much as it is an important question for policy-makers. While community solar must be enabled by state or utility policies, actual projects get deployed by private sector and nonprofit developers like Groundswell. We’re answering the challenge by partnering with other community-focused nonprofits including houses of worship to develop community solar projects that are designed to share power with low-income households from their inception. In addition to treating projects like a small utility instead of a big rooftop through our project finance model, our subscription program design enables market-rate subscribers to share solar savings to enable low-income households to enroll at no-cost. Because of community solar, we can help neighbors help neighbors.
Work and Wealth
Sharing power through community solar doesn’t end with electricity cost savings. Being deliberate now, as the market emerges, also means that private and nonprofit leaders can build outreach, internship, apprenticeship, and local job opportunities into how the industry does business. As experienced professionals, we sometimes forget how hard it can be to even see the opportunities when you’re young, don’t know the industry, or don’t know the jargon. Making the time to invite new people into the field is a powerful opportunity for leadership, and it’s well worth the effort.
Community solar can do more than create work, it can build wealth. NREL also projects that the investments associated with the growth of community solar could range from approximately $8 – $16 billion. Creating approaches to project delivery that enable community institutions to own the means of solar energy production can fuel community economic development. For example, the value of Solar Renewable Energy Credits (SREC) in the District of Columbia are currently four times the value of the underlying solar electricity. Keeping the SREC revenue in the community to support reinvestment through project ownership is just one way to develop the community solar market in order to deliver broader benefits for everyone.
Local Action Leads the Way
Community solar is enabled by state or other local utility policies and programs, so the associated market opportunities are fundamentally local in nature. Creating market momentum and making an impact means going deep in the local community. From organizing projects among people and organizations that want to work together to share power, to developing expertise in the local policy and utility environment to deliver a project, community solar takes local expertise.
While a growing number of states are adopting community solar policies, how those policies are implementing incentives for serving low-income communities vary broadly. The finest details, including the form design for enrolling residential community solar subscribers, can impact the shape and pace of development of state markets.
If you’re working in a state that’s implementing new policies, get involved in the process to help ensure that the new industry rules will work for all members of the community. If you have experience in a more mature market, share what you know to help emerging state markets grow better and faster. Community solar projects are enabled by people and organizations working together, and the further upstream we apply that principle, the faster and more efficiently this promising market will emerge.
Let’s Get to Work
Community solar enables us to share power – as property owners, solar developers, subscribers, utility leaders, policy makers, and people who care about the places we live and the people we share them with. The extent to which it fulfills that promise will depend on the choices we make as market leaders. Because the market is shaped by state and utility policies and programs, there’s no one answer for how to do it right – though we can work together to share what works and what doesn’t to move faster. Local innovation that scales can drive a thriving national marketplace to help reduce electricity bills, create work, and build wealth for a much more diverse community of people than have enjoyed the economic opportunities of solar energy to date. If we begin by asking ourselves how our work can help our neighbors, we’ll be on the right path.
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