As we work toward a renewable energy future, it is important that clean power is available to all. One key component to achieve this goal is community solar. Community solar programs provide more equal access to solar energy because it is available to everyone. Community solar programs are particularly beneficial for renters and those who don't own property, for properties that lack a rooftop or other attributes to support solar, and for low-to-moderate income (LMI) or otherwise disadvantaged customers. Community solar options allow both residential and commercial customers to subscribe to or buy into a large community array and then receive energy bill credits for their portion of generation.
As of 2021, 22 U.S. states as well as Washington, D.C. have policies supporting community solar. This number is continuously on the rise, and does not include an additional 17 states which host projects independent of state assistance. These individual projects are typically run by municipal and cooperative utilities.
What Makes A Good Community Solar Program?
A good community solar project should have a few main objectives, the most important being that it's accessible to everyone, regardless of background, and that all participants reap tangible benefits from solar energy. Customers should have flexibility and choice in how they participate in the program and the renewable energy market as a whole. Ideally, a community solar project presents no upfront costs, and there are good-faith efforts for fair pricing and strong returns on customer investments. Project operators, regulators, and other key players must provide transparency around program operations, customer benefits and risks, and legal compliance.
Emerging Community Solar Programs
Maryland
Maryland is an up-and-coming player in the community solar landscape and overall presents great opportunities for clean energy progress. In 2019, Maryland passed the Clean Energy Jobs Act. This law requires the state to meet at least 50 percent of its energy needs with renewable sources by 2030, and reach 100 percent renewable energy by 2040. It includes a 14.5 percent carveout for solar generation by 2028 and funding opportunities for minority-owned clean energy businesses and LMI solar access.
Even prior to the new legislation, Maryland hosted a Community Solar Pilot Program and community grants for commercial and residential energy customers. In 2017 the Public Service Commission (PSC) adopted regulations to pilot community solar operations, encourage private investment in Maryland's solar industry, and diversify the state's energy mix in compliance with their Renewable Portfolio Standard. The pilot initially set aside 193 MW of community solar capacity across the state and has since expanded to nearly 600 MW as of 2021. Individual projects are permitted up to 5 MW in capacity. Subscriptions are available to anyone with an electric meter account - regardless of property ownership status - in a utility territory containing a community solar array.
The pilot also incentivizes solar companies to service LMI customers, setting aside 10 percent of the program's capacity for low-income customers and an additional 20 percent for both low- and moderate-income subscribers. New legislation passed last year exempts community solar projects from certain property taxes if at least half of the capacity serves LMI customers and offers those subscribers a 20 percent discounted base rate.
This month, Leyline spoke with Stephanie Johnson, Executive Director of the Chesapeake Solar and Storage Association (CHESSA), to learn more about Maryland's progress. CHESSA works in the state to expand solar development, addressing interconnection and permitting obstacles and expanding low-income access to clean power. Johnson says the pilot program has been largely successful thus far and currently hosts about 90,000 subscribers.
Many companies and consumers in the state want to cement a permanent community solar program once the pilot ends. Johnson notes that early zoning and permitting issues and COVID-19 challenges limited study data and disrupted the project's timeline a bit; nevertheless, the state government is currently hearing a bill that would enact a long-term community solar initiative. Among other updates, it suggests a permanent program that increases LMI access to community solar. First and foremost, the proposed plan would increase the LMI carveout from 30 to 40 percent. It would remove existing financial barriers for those without credit cards or bank accounts, eliminating the current provision requiring an up front payment method and allowing self-attested income eligibility. Consolidated billing - lumping solar credits and charges into a single utility bill - would additionally facilitate easier payments.
Johnson notes that state government members are largely motivated to address environmental and social issues, and it is likely that the permanent program legislation will pass this year. "Maryland is really committed to equity, inclusion, and combating climate change, and they are willing to work to make community solar happen"
Maryland hopes its community solar options will attract new investments in the renewable and green economy. Adopting a permanent program will provide market certainty for outside investors and developers and help drive state progress forward.
More Established Community Solar Markets
The figure above shows the largest operating capacity for community solar programs in the United States as of the second quarter 2022. Below we describe a few of these and other notable programs.
Minnesota
Since its inception in 2013, many have called Minnesota's Community Solar Garden (CSG) program one of the best in the nation. As of December 2022, the program hosts 848 megawatts (MW) of operational capacity across 400 sites, and services more than 28,000 subscribers. These customers receive multiple millions in bill credits each month, and the state's main utility reports that even customers not subscribed to community solar have received residual financial benefits from the program. The program limits individual subscriptions to 120 percent of the subscriber's average annual energy usage, or 40 percent of a single solar garden.
The past couple of years demonstrated efforts to require clear reporting, enhanced transparency, and improve customer access to program information. One downfall, however, is that Minnesota's program historically lacks specific support for LMI subscribers and those in historically-burdened communities. It also primarily serves commercial customers and does not ensure benefits for residential subscribers. Luckily, change may be on the way - the state recently introduced a law which would require greater benefits and reduced energy bills for LMI customers, and carve out at least 50 percent of each solar project's capacity for residential subscribers.
Illinois
Illinois offers a legislation-backed adjustable block program (Illinois Shines) that promotes solar development and meeting climate goals. Customers may subscribe to community solar projects in their utility service area and receive credits for their energy bill. Illinois also hosts a Solar for All program that targets solar accessibility for LMI households. Those meeting income eligibility participate at no upfront cost and receive guaranteed savings credit on their energy bills.
New York
New York has one of the top community solar markets in the U.S. As of 2021, community solar comprised 70 percent of the state's total installed solar capacity. In 2022, the state boasted more than a gigawatt (GW) of functional community solar - enough energy to serve more than 200,000 homes - and had projects in the pipeline to power an additional 400,000. These installations help the state progress toward meeting its ambitious climate goals, which include a 10 GW solar target by 2030.
New York's program excels at fostering solar access for all. The program has minimal-to-no upfront costs and offers shorter-term commitments than the more lengthy subscription terms in other states. Energy customers can search online to find qualified projects in their area and have clear access to terms, incentives, expected savings, and more. Once subscribeding, customers receive credits on their monthly bill. The state's climate act also requires a significant portion of clean energy investments to target disadvantaged communities. This solar equity framework includes incentives for community solar on multi-family, affordable housing properties and community solar adders LMI communities. New York's Solar for All initiative additionally provides community credits for more than 175,000 participants in a low-income energy assistance program.
Leyline is excited to support community solar projects as they take off across the country. From Maryland, to New York, and beyond, there are countless opportunities for investments supporting an equitable, clean energy transition for all.
If you need investment in your community solar project, please send us an email at contact@leylinecapital.com
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