The Smart Electric Power Alliance (SEPA) defines community solar as “a voluntary program whereby a solar-electric system provides power and/or financial benefit to multiple community members in which community members may or may not own the system itself.” Community solar programs have become increasingly popular in the U.S. because they provide access to solar without the complexities of installing, owning, and operating individual systems. However, the expansion of community solar faces challenges of replicability across different states, utility territories, and solar market types. Many models have emerged with varying degrees of regulatory and market frameworks behind them and little consistency exists on how programs are administered, participant benefits are assigned, and customers are charged. While it is assumed that community solar meets the needs of customers, no comprehensive or comparative research has been conducted on the various models and costs. To date, the benefits of community solar are largely based on anecdotal evidence.
SEPA is working to spark growth of community solar models that are more closely aligned with the needs and interests of consumers and stakeholders. The project team set out to produce a range of more standardized, streamlined, and cost-effective business models that can be easily localized for different regions across the country by researching and comparing models, conducting consumer market research and disseminating research results to solar industry stakeholders. Research on community solar models was driven by a working group made up of diverse stakeholders including utilities, solar industry representatives, state governments, non-governmental organizations, and consumer advocacy organizations. Through the standardization of community solar models and a better understanding of customer interest, SEPA aimed to further encourage and enable the expansion of community solar deployment nationwide.
The SEPA project is driven by a working group comprised of members from utilities, nonprofits and solar industry professionals. As part of the initiation process, the SEPA team developed a definition of community solar as: voluntary rooftop alternatives for groups of participants, where supply is most often provided by a larger, ground-mounted PV system, and participants are involved in a two-way transaction. The SEPA team solicited feedback from working group members to hone programmatic attributes and the program design process with the goal of creating several comprehensive community solar models capable of functioning in a variety of circumstances.
The working group produced the Community Solar Program Design Report, which serves as an introductory resource for entities pursuing community solar programs. One element of this report is a survey of existing community solar programs, which touches on items such as subscription levels, development time and administrative costs witnessed by the programs.
Key takeaways include:
Community solar is an optional electricity product from the customer’s vantage. For it to “sell,” subscribers need to want it. To date, there has been very little research examining what exactly subscribers want from a program. SEPA and the Shelton Group conducted a nationwide survey and set of focus groups designed to tease out the preferences of potential community solar customers. SEPA’s market research is one of the first and most comprehensive efforts to understand consumer preferences on community solar. SEPA began this effort by hosting focus groups to discover which value propositions resonate with potential community solar customers and what trade-offs customers are most willing to make.
The findings from these focus groups demonstrated that mainstream energy consumers find community solar to be a conceptually attractive alternative to rooftop solar, but the initial cost constraints, payback periods, and long contracts common to many existing program models pose barriers to participation. Most consumers preferred the subscription rate model for community solar participation as it presents greater flexibility and lower investment costs compared to a panel lease model. While cost savings presented the primary benefit of investing in solar, participants consistently indicated concern for the environment and a preference for energy sources that were less environmentally harmful. The result was the report What a Community Solar Customer Wants, released in August 2016.
SEPA is currently taking the lessons learned from this research and implementing them in several technical assistance efforts with utilities and non-utilities pursuing community solar programs. The project team is providing technical assistance to eight utilities interested in modifying their current model or adopting one of the newly standardized community solar models.
The organizations include three nonprofits, three investor-owned utilities, and two public power utilities. SEPA has assisted these organizations in developing and executing marketing plans, analyzing the financials of various community solar program designs and conducting and interpreting customer surveys. Ultimately, these technical assistance engagements will result in the installation of at least 4MW of new solar.
Part of the technical assistance provided to these organizations was a SEPA survey of over 6,000 potential residential and commercial community solar subscribers. Each survey was customized to match the organization’s needs, as well as collect information on potential subscribers’ understanding of and interest in a community solar program. One high-level takeaway from these surveys is that there is high demand for solar ownership—over 80% of survey participants indicated they are interested in community solar.