10 predictions for community solar in 2018 via Clean Energy Collective

Clean Energy collective

From an evolving market structure to technology innovation, the community solar landscape is transforming quickly. What does this mean for 2018? Clean Energy Collective (CEC), the nation’s leading community solar developer and solutions provider, forecast what is on the horizon for community solar. CEC’s experts offer the following 10 predictions for 2018.

“We are inspired by the surging demand for renewables and the expectation that community solar will play a leading role in solar’s growth for years to come” said Paul Spencer, CEC Founder and CEO.

1. Strategic partnerships will accelerate the drive to scale.

2017 saw solar financiers and asset owners looking to become more involved in the earlier stages of community solar development, seeking the potential for stronger profits indicative of this asset class; evidenced by CEC’s joint development agreement with ENGIE. Leveraging shared financial and technological resources will accelerate the development and deployment of more and larger community solar portfolios in 2018, broadening access to shared renewables to a significantly wider customer base.

2. External factors will intensify the focus on cost-effectiveness.

Equipment costs are continuing to fall, but declines are slowing. Rising interest rates, rising interconnection costs, potential import tariffs, and potential changes to the federal tax code will provoke an even greater focus across the solar industry on optimizing program design, integration, and management to maintain community solar’s pace of growth. (See #4 regarding technology.)

3. Commercial and industrial customers will take a larger share of capacity.

Solar procurement by commercial and industrial customers grew substantially in 2017 as more businesses looked to renewable energy for cost savings and to boost their sustainability credentials. One of the most critical strategic initiatives for utilities is allowing key C&I customers to procure renewable energy from a dedicated offsite facility/program via community solar. Like residential customers, shared off-site generation expands the accessibility of renewables purchases beyond the Fortune 100 to medium and small companies that lack the resources for separate project development. In 2018, community solar will take a lead role in providing commercial and industrial companies with a path to renewable energy.

Nexamp community solar

Nexamp community solar project.

4. Demand for technology will increase from both asset developers and owners.

2017 saw effective progress toward reducing the complexities of community solar programming by standardizing policies, procedures, and technologies where possible. Enterprise-level software opened the gates to greater efficiency and accuracy throughout the proposal, e-commerce, and customer engagement processes. For 2018, the integration of multi-megawatt projects and portfolios means integrating with significantly more utilities and engaging an exponentially larger number of customers. The biggest winners in 2018 will be IT solutions that seamlessly manage customer acquisition, credit allocation, and collections with lower costs and less risk through automation, not only for single community solar programs but for entire energy portfolios. CEC is investing significantly in advancing its Community Solar Platform and IT architecture to continue to shape and serve the next-generation of community solar programs and community solar customers.

5. Data security will be a key value proposition.

As the shift to mobile and cloud technologies becomes the norm in most industries, data vulnerability is top-of-mind for all IT administrators. Data security processes and planning for community solar programming, particularly regarding the requisite software administering bill credits and customer benefits, is vital for the protection of utilities, consumers, and the grid. 2018 will see an increased focus on available and emerging technologies delivering information security to meet the industry’s rigorous requirements. Security certification of community solar software solutions will quickly become the norm, raising the bar in solution maturity similar to financial technology solutions.

6. Project finance and product strategies will move closer to balance.

Expanding project financing options and sources is still at odds with the move toward more consumer-centric products. Both purchase and subscription programs have been subject to relatively strict terms from finance partners, limiting flexibility in product strategy. We believe 2018 will be turning point toward more adaptable financing as additional risk mitigations emerge and the finance market better understands the reduced risks inherent in community solar solutions. New technologies for acquiring and engaging customers, increasing participation by investment-grade companies, and further validation of community solar’s low customer default and streamlined ability to re-subscribe replacement customers will allow for shorter contract terms, reduced credit score thresholds, and an overall enhanced customer buying experience.

7. Big capital will move into the market.

The underlying variables of community solar programming – like multiple customer profiles, unique technology requirements, and maintaining full subscribership – has been thorny for capital markets. However, in 2017 we saw a slow but measured migration from boutique investors to the more mainstream financial community. Bigger financial players are becoming more familiar and comfortable with community solar’s long, optimized assets and predictable cash flows, and are now turning their focus to addressing the mechanisms for market development. 2018 is the year large institutional investors will move in, positioning community solar as the next place to put low-risk capital at scale.

8. Utilities will launch larger programs more frequently.

Many utilities blazed the community solar trail in 2016 and 2017 to integrate DER solutions and satisfy customers. Several of the U.S.’ largest utilities now have operational community solar programs, and dozens more have initiated programs — in regulated and deregulated markets, by investor-owned, cooperative, and municipal utilities. Such pervasive exposure has provided sufficient evidence for the best practices that allow for low-risk, cost-appropriate, and highly engaged community solar programs. In 2018, we expect less “piloting” by first-time utilities and more comprehensive, full-scale deployments by those currently testing programs. This move to scale will provide further economic efficiencies, driving even more benefit to utilities and customers.

9. Prevailing policy will accelerate market development.

Advanced tools and resources are emerging to help policymakers, regulators, and advocates navigate tariff and compensation strategies, incentives, land use and siting criteria, interconnection issues, consumer protections, and more to balance a market’s diverse interests and a program’s economic viability. In 2018, state policy development will take on a renewed urgency, and we expect to see community solar raised as a key platform item in state and federal elections in November. Streamlining adoption of well-vetted enabling policies and regulatory frameworks in slower-to-adopt states will translate into faster legislative action, fewer pilot programs, and more receptive markets.

10. Uncertainty at the federal level will temper enthusiasm.

Despite all the positive indicators, unknown risks at the federal level could pose new challenges for the industry in 2018. Complications from a possible ITC tariff, the federal tax overhaul, continued anxiety with EPA policy direction, and the DOE’s renewed interest in coal are ingraining a degree of uncertainty that is difficult to quantify. On the positive side, the solar industry is gaining momentum through increasing numbers of legislators and government officials across the country supporting community solar thanks to a well-informed base of industry advocates. This advocacy is fueled by solar industry associations, executives, employees, customers and enthusiasts, and in 2018 we will see an even stronger and louder coalescence of stakeholders with an amplified grass roots movement that will more deeply engage with elected officials and regulators. Equally important, rapidly declining solar costs are allowing solar to become a much larger part of the national energy mix simply due to its recent status as a low-cost power solution. This fact has increased utility support for many pro-solar initiatives.

— Solar Builder magazine

CleanChoice Energy expands community solar division

community solar

CleanChoice Energy is expanding its community solar division and bringing even more solar expertise in house, hiring Tim Ahrens as Managing Director of Renewable Energy Development.

Ahrens will lead CleanChoice’s development team with the goal of providing this additional service to existing projects and partners as well as sourcing new opportunities to expand the company’s solar offerings. Ahrens focus will be on advancing projects from inception through to construction. Projects will be sourced through either greenfield or acquisition initiatives with the team ensuring viability through its diligence protocol.

Ahrens has over 20 years of professional experience in environmental remediation and renewable energy initiatives. Most recently Ahrens focused on the development of remote net metered solar photovoltaic projects within New York and Vermont. Prior to this, Ahrens spent time working on the development of wind projects in New York and solar in Puerto Rico in addition to environmental remediation projects throughout the East Coast.

“We’re excited to be expanding our community solar skill set,” said Tom Matzzie, Founder and CEO of CleanChoice Energy. “We have an ambitious agenda in the next several years and see Tim as an incredible value-add to our existing partnerships and to the ones to come. More community solar means more and better choices for consumers, more economic development, less pollution and more jobs.”

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CleanChoice Energy offers only 100 percent renewable energy products to American homes and businesses. The company has made it easy for people to choose clean energy as-a-service instead of as a home construction project. CleanChoice Energy’s innovative approach has allowed them to grow quickly since launching in 2013. The company has served more than 1.5 billion kilowatts of clean energy and is now one of the largest direct-to-consumer renewable retail energy providers in the United States.

— Solar Builder magazine

This community solar ‘Solutions Toolbox’ looks to grow the shared-solar market

Community Solar financing utility

Noted in our top feature this week, community solar is a growing opportunity in various markets across the country. One big effort in its expansion, the Community Solar Value Project (CSVP), an effort co-funded by the U.S. Department of Energy SunShot Initiative, has launched a new Solutions Toolbox for utilities and their partners, who are developing community solar and shared-solar programs. The Project team engaged the Sacramento Municipal Utility District (SMUD) and more than a dozen other utilities nationwide, in identifying best practices and innovations that add value, while speeding the path to market for community solar programs.

Community solar generally refers to shared solar development, in which customers participate by subscribing to solar project output or through the purchase or lease of solar panels. In some states, policy dictates that this is for the most part a non-utility offer, but in most states, utilities play a leadership role in acquiring the solar resource and offering it as a customer program. According to the Smart Electric Power Alliance (SEPA), some 170 utilities nationwide currently offer or are planning to offer community solar. SEPA has estimated that community solar capacity topped 300 MW by year-end 2016, with continued growth accelerating due to the convenience and improved economy of scale of this solar option. The CSVP is focused on helping utilities to develop programs that meet the needs of both the utility and the customer. This includes programs that are developed entirely by the utility, and also programs where the utility works with non-utility service providers.

“The CSVP puts emphasis on getting projects and programs going faster and better,” explains Jill Cliburn, CSVP Principal Investigator. “Whether the utility wants to complete the effort in-house or to out-source key elements, it still takes internal collaboration and skillsets that are relatively new to utility planners,” Cliburn says.

For example, the CSVP has found that most utilities are used to thinking about the hardware first and the market research later; the CSVP program-design process helps support a give and take between the utility and customer sides from the very start. Other areas where CSVP has focused include helping utilities to price programs competitively, while meeting internal utility requirements. Also, CSVP offers practical advice on how and why to design energy-storage or demand-response programs that help to manage the variable-generation of a growing solar-generation portfolio. “This is an emerging interest among utilities, but it is fast-emerging,” Cliburn says.

Solar for All: How to incentivize community solar projects to benefit low-, middle-income customers

Still, utilities are challenged by different problems, which are unique to their policy environments, organizational structures and customer demands. For that reason, the CSVP Solutions Toolbox takes a flexible approach, letting users choose among five challenge areas, in addition to the overall program-design process. The moniker for the Toolbox site is, “Solutions Beyond the Box,” and it is a nice coincidence that the topics covered on the site may be represented on the six sides of a box. These include

• The overall, cross-departmental program design process
• Strategic solar project design
• Project financing and procurement
• Target marketing for customer acquisition
• Integration with solar-plus measures, such as energy storage and demand-response
• An analytic approach, streamlined to get from project economics to program pricing

CSVP is led by the San Francisco-area energy consulting and analytics firm Extensible Energy LLC (John Powers, Project Officer), with support from Cliburn and Associates. Additional support has been provided by Navigant Consulting, Olivine, Inc. and Millennium Energy. Utility participants include the Sacramento
(California) Municipal Utility District (SMUD), Public Service of New Mexico, and other utilities nationwide.
U.S. Department of Energy support was provided under the Solar Market Pathways program of the SunShot Initiative.

— Solar Builder magazine

Three community solar projects break ground in Massachusetts

Clean Energy collective

Clean Energy Collective (CEC), the nation’s leading community solar developer and solutions provider, has broken ground on three new community solar facilities in Massachusetts, adding a combined 4 MW of new generation to the Commonwealth’s mounting shared renewables portfolio. Located in the communities of Millis, Rochester, and Wendell, the projects will serve customers in National Grid and Eversource service territories and are expected to complete construction by March 2018.

Clean Energy Collective, one of the region’s largest community solar providers, has developed 34 projects – nearly 50 MW of capacity – in Massachusetts, as the company continues its mission to deliver broad and equal access to locally-generated, affordable, clean energy to all electricity ratepayers across the Commonwealth.

“Community shared solar is proving to be the clean energy solution Massachusetts customers are looking for, and CEC is continuing to deliver projects that provide this choice,” said Tom Sweeney, CEC’s President of Renewables. “We look forward to serving even more Massachusetts customers and remain diligent in our mission to ensure every household and business in the Commonwealth has access to local clean energy.”

Through CEC’s RooflessSolar program, any Massachusetts electric customer – including residential, commercial and government customers – can secure long-term energy savings and hedge against increasing energy costs without the need for a solar-suitable roof or upfront investment.

New guide shows strategies for pairing community solar with storage

Developing these projects also delivers broad benefits to the host communities through significant construction investment, a variety of high-paying jobs, lease payments for land owners, substantial tax revenues, and valuable utility system upgrades.

In addition to the growing portfolio of completed projects, CEC has several additional projects in the development pipeline to serve the state’s increasing demand. CEC expects to begin construction on several of these before the end of 2017.

Demand for community solar is growing throughout the country as well. CEC has built or has under development more than 130 RooflessSolar projects within 33 utility service territories across 15 states, serving thousands of customers, and representing more than 350 MW of community solar capacity.

— Solar Builder magazine

New guide shows strategies for pairing community solar with storage

community solar

The Community Solar Value Project (CSVP), an effort co-funded by the U.S. Department of Energy SunShot Initiative, has released a guide that provides practical answers to questions about why and how to use energy storage in combination with community-scale solar developments. Solar Plus Storage Companion Measures for High-Value Community Solar: A Guide for Utility Program Planners is useful to utility planners, resource procurement specialists, solar program managers, marketing program managers, non-utility vendors and policy makers, who wish to understand current and emerging storage opportunities and measures on both sides of the customer meter. The Guide was introduced this week, at the annual meeting of the Peak Load Management Alliance, in Boston.

The Guide is a response to soaring interest in storage as way to more fully utilize rising penetrations of variable renewable energy resources. According to GTM Research, the market for batteries alone is set to grow 11 times over between 2016 and 2022—to about 2.5 GW. Increasingly, utilities are running storage pilot projects, and some of them are finding that a varied approach, for example, using utility-side batteries, plus customer-side batteries or thermal storage, can expand their storage capabilities cost effectively. Interest in storage is rising as a customer option, too, in response to time-of-use rates, high demand charges and interest in customer-side resilience.

The CSVP sees storage-enhanced community solar as a useful starting point to utility and customer interests around both solar and storage together, and to increase overall project value. The Guide begins with an overview of broadly defined storage technologies, from pumped hydro and flywheels to batteries, thermal storage, and more. Then it presents a five-step decision process to help utilities match technology choices to the value streams that they would find most available and economical. It also guides utilities to consider the storage decision from the customer’s viewpoint, to assure that any customer-side storage offer would find a ready market. A scoring methodology helps planners compare storage options, in terms of the various integration values presented.

Three takeaways from SEPA’s community solar report

The Guide takes into account detailed input from the CSVP’s utility advisory group, comprised of both public power and investor-owned utilities, as well as input from the National Renewable Energy Laboratory.

“We found that utility-side battery storage is the obvious answer, but not the only answer, or even the right answer, depending on what integration problems the utility is trying to address,” explains John Powers, who is contract officer for the CSVP and a Guide co-author. As integration challenges increase, from minute-to-minute resource variability, to a daily mis-match between resource availability and peak load, to the economic challenges of arbitrage, utilities and customers will find ample solutions. “It’s exciting to find so many storage solutions in the toolbox—so long as you learn how to use them,” Powers says.

The Guide highlights solutions in six challenge areas that are frequently encountered by community solar program designers. Those areas include:

  • collaborative processes,
  • strategic solar design,
  • procurement,
  • target marketing,
  • pricing, and
  • solar-plus companion measures.

CSVP is led by the San Francisco-area energy consulting and analytics firm Extensible Energy, LLC, with support from Cliburn and Associates, Olivine, Inc., Navigant Consulting, and Millennium Energy. Utility participants include the Sacramento (California) Municipal Utility District (SMUD), Public Service of New Mexico, and other utilities nationwide. The project is cosponsored by SunShot, under the Solar Market Pathways program of the U.S. Department of Energy.

— Solar Builder magazine