$8B-$16B Investment Could Double Solar Market

Almost half of homes and business in the United States are unfit for rooftop solar installation, either because of building structure, credit rating or other obstacles. But that doesn't mean they have to sit out the renewables revolution.
"Community solar," sometimes referred to as shared solar or solar community gardens, can expand access to solar energy to 100 percent of the nation's homes and businesses, according to the director of the Department of Energy's Solar Technologies Office. All the market needs, said Director Minh Le, is an infusion of financing.
"We're looking at anywhere from 5.5 to 11 gigawatts of market potential by 2020, just over the next five years or so," Le said Thursday in an appearance at New York Energy Week. "And it's really an exciting market segment, representing $8 to $16 billion of potential financing that's required to enable that market segment to grow."
Potential sources of that financing sat alongside Le Thursday at the Nixon-Peabody offices on Madison Avenue, and they seemed to share his enthusiasm:
• "It just provides access to more customers. We like it for that reason," said Mike Ziemke, the managing director of capital innovations for SunEdison.
• "At NRG we consider community and shared solar a really outstanding opportunity for the retail and commercial level," said Evan Conley, manager of NRG Home Solar.
• "As we look going forward for the next few years, this is probably the biggest growth area for us," said Laura Stern of Nautilus Solar.
About 80 percent of the rooftop owners in America are not investment rated, Stern said, which means they won't have the same access to solar financing mechanisms, like yieldcos, that larger players do. But they can gain access by banding together in shared solar projects.
According to the Department of Energy, "Shared solar models allocate the electricity of a jointly owned or leased system to offset individual consumers’ electricity bills, allowing multiple energy consumers to share the benefits of a single solar array."
It's solar energy on the model of the community garden.
Like community gardens, community solar arrays can bring benefits to people otherwise excluded. That could allay economic-parity concerns that have dogged the solar boom in the residential and small business sectors— the worry that as wealthier customers install solar, customers who can't afford solar will have to bear more of the cost of maintaining the grid.
"I start to worry about economic parity when we start this transition, and that's happening now," Le said. "Community solar is an opportunity where low- and moderate-income households can actually participate in this energy transition."
Greater participation means a larger market, of course—much larger, according to a study released in April by the National Renewable Energy Laboratory:
"By opening the market to these customers, shared solar could represent 32 percent–49 percent of the distributed PV market in 2020," the study concludes, "thereby leading to growing cumulative PV deployment growth in 2015–2020 of 5.5–11.0 GW, and representing $8.2–$16.3 billion of cumulative investment."
A few days before NY Energy Week, I was in the Chicago offices of SoCore, a solar developer owned by Edison International, the holding company for Southern California Edison. SoCore Senior Associate Brett Cullen was telling visiting members of Young Professionals in Energy that community solar, a relatively new concept, offers the solar industry one of its best opportunities for growth.
"There's a few new models out there that I think are pretty intriguing for solar developers as well as for people who are interested in buying or leasing solar. One of them is community solar," Cullen said. "It allows us to build projects offsite, away from where the customers are going to consume the energy, tap into the electrical system, and then sign up customers for that particular garden."
But according to Cullen, utility companies are fighting the expansion of community solar.
"Community solar sounds kind of cool in theory. It allows people to get solar if they want to," he said, but "bottom line, utilities are fighting this very hard. It's a battle that is happening today. It's a very real, real problem for the solar industry."
If you ask utilities, however, they'll tell you they're not fighting community solar, but leading the way.
"Utilities across the country are taking a leading role in community solar projects aimed at expanding access to clean power for customers who, for a variety of reasons, may not want to or be able to install solar panels on their roofs," according to a recent issue of Energy Talk, a newsletter published by the Edison Electric Institute, a utility-owned trade association.
"Community solar is growing exponentially across the United States, and utilities are leading the deployment."
One issue is whether community solar participants pay to support the grid, another is who owns the power plant—even if the power plant is a solar community garden.
In comments to the Energy Dept., Edison Electric Institute General Counsel Edward H. Comer expressed support for community solar as something that "some utilities" are doing to expand customer access to renewable energy. But Comer argued that utilities should control the assets:
"Experience has shown that utility participation, input, visibility, and control over the assets connected to the utility’s transmission and distribution system is essential for optimal siting and efficient operation of DG [distributed-generation] facilities, including solar. Especially as penetration of solar DG increases, the challenges in operating the electric grid to maintain safety and reliability mount and it is critical for a utility to be able to manage the solar DG assets connected to its system for the benefit of all customers."
Le believes utility opposition can be overcome, and when it is, he expects utilities to fulfill the leadership role they describe themselves as taking.
“Utility participation is going to be transformational,” Le told Utility Dive. “The perceived resistance to solar from utilities is really not there when you talk about aggregating consumers on larger projects to get economies of scale and siting near substations or distribution feeders to reduce interconnection issues.”
America Will Achieve Its Sunshot

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