Community Solar Value Project
Project organization: Extensible Energy
Highlights
- Developed a web-based archive and a toolbox of solutions for designing high-value community solar programs, with an emphasis on utility-based programs.
- Worked with and learned from eight Utility Forum members and more than a dozen other utilities of all kinds to generate solutions to challenges in developing community solar programs.
- Published the toolbox to share resources for finding proven solutions to six common challenges in developing community solar programs:
- Planning process organization
- Strategic solar project design
- Project financing and procurement
- Targeted customer acquisition marketing
- Adapting high-value demand-response and energy storage resources to be compatible with local solar and to increase wholesale and retail net benefits
- Streamlining the analytical process, to price programs competitively by incorporating identified benefits
- Planning process organization
- Strategic solar project design
- Project financing and procurement
- Targeted customer acquisition marketing
- Adapting high-value demand-response and energy storage resources to be compatible with local solar and to increase wholesale and retail net benefits
- Streamlining the analytical process, to price programs competitively by incorporating identified benefits
Background
The Community Solar Value Project (CSVP) provides a resource for anyone starting a community solar program, especially for utility-based staff. The CSVP team developed a planning process and tools to help utilities increase the scale, reach, and value of utility-based community solar. Led by Extensible Energy, LLC, with support from Cliburn and Associates, Olivine Inc., Navigant, and Millennium Energy, the project engaged the Sacramento Municipal Utility District, the Public Service Company of New Mexico, and more than a dozen other public power and investor-owned utilities nationwide to develop and implement improved community solar program designs.
The project was unique in its focus on helping the utility’s community solar program planners work collaboratively and efficiently across department boundaries and with third-party contractors, as needed. The goal of the project—to increase the net value of community solar from both the utility and customer perspectives—requires a broad and practical approach. Instead of offering a rigid step-by-step process, the CSVP team focused on finding solutions in six challenge areas where community solar planning can get stuck and where out-of-the-box thinking is required to move forward.
Where existing information portals and resources already offered good solutions, CSVP referenced them, but in many areas, CSVP broke new ground.
Utility Engagement
The CSVP team convened a Utility Forum to guide this work and ensure replicable and achievable program designs. Forum members, including the Sacramento Municipal Utility District (SMUD), the Public Service Company of New Mexico, and about a dozen other utilities, helped the CSVP team identify challenge areas, test likely solutions, and transform the solutions into flexible program design tools.
To explore different aspects of these challenges and examine how leading utilities and stakeholders could improve community solar, CSVP led four utility workshops kicking off the project and addressing high-value community solar; strategic program design; the value of the “solar triple play,” or the inclusion of demand response and storage (also known as solar-plus strategies) in community solar programs; and a toolbox of solutions for program design. In June 2017, a fifth and final workshop focused on community solar procurements, programs, and pricing was held in Golden, Colorado with co-sponsors including the Western Area Power Administration. This workshop attracted a large audience of utility representatives from across the U.S. and served as a showcase for case studies, best practices, and CSVP solutions.
Working with the CSVP team, SMUD completed a cross-departmental planning and program design exercise. This resulted in a plan to expand SMUD’s Solar Shares program to deliver more than 100 MW of community solar resources over the next two to five years through multiple shared solar products serving different market segments and customer classes, including community solar for new community developments and disadvantaged neighborhoods with high proportions of low-income residents and low participation in solar procurement.
In addition to these workshops and on-site work at SMUD, the CSVP project team reached out to other utilities and stakeholders through more than a dozen webinars showcasing innovations in technology and regulations that could be instrumental in growing the utility-driven community solar market.
Resources
Community Solar Project Ownership & Financing Structure... Community Solar Project Ownership & Financing Structures
This working paper aims to help utilities understand their choices for structuring and financing community solar programs.
Community Solar Value Project Resource Library Community Solar Value Project Resource Library
This online resource library provides presentations and publications relating to ownership and financing models, solar+storage and demand response, and marketing, among other topics.
Pricing Model of Interest for Utility-driven Community Solar ... Pricing Model of Interest for Utility-driven Community Solar Programs
This table provides a side-by-side comparison of community solar pricing strategies at seven utilities nationwide.
Community Solar Value Project Webinar Library Community Solar Value Project Webinar Library
This webpage features webinars held by the Community Solar Value Project on emerging community solar and demand response innovations.
Community Solar Value Project Workshops Library Community Solar Value Project Workshops Library
This webpage hosts Community Solar Value Project workshop summaries and lessons learned.
High-Value Community Solar Program Design
Some of the toughest decisions identified by Utility Forum members involved whether to fully or partially outsource community solar project development, how to finance projects, and how to efficiently enroll customers in the program. The CSVP team developed solutions to each of these challenges and tested the solutions in collaboration with Utility Forum members. Resources available in the CSVP toolbox include:
- An overview of the community solar landscape
- Guidance on when to outsource some or all aspects of project development
- Request for proposal examples for acquisition of community solar
- A summary of project ownership structures and finance options, plus the pros and cons of each option
- A step-by-step guide to tailored market research and segmentation
Resources
Five Steps to Tailored Market Research Five Steps to Tailored Market Research
A webinar from CSVP on tailoring market research.
Key Points to Consider In Achieving YOUR Best Balance Between ... Key Points to Consider In Achieving YOUR Best Balance Between Out-sourced and In-House Program Strategies
A presentation on how to find the balance between out sourcing and working in house when designing a program.
Pairing Community Solar with Demand Response and Energy Storage
CSVP broke new ground in the development of program-design tools to help utilities balance community solar (and other high-penetration distributed renewable energy resources) with demand response and energy storage in order to address load management, integration needs, and the “duck curve,” or the duck-shaped graph that electricity demand takes throughout the day with large-scale solar deployment, with demand spiking in the morning and again in the evening before declining at night. A growing number of utilities today want to know how to solve renewables-integration problems locally, or avoid them altogether. Other utilities want to use storage to address energy resilience needs. Integrating community solar with demand response or energy storage programs, or offering separate but coordinated programs, can help.
CSVP produced two first-of-their-kind guides to assist in this challenge area. One suggests ways to use community solar plus demand response, and another suggests how to use community solar with energy storage on either the customer or utility side of the meter. These guides, webinar recordings, and supporting materials on the CSVP website are also helpful to utility planners who prefer to address solar and storage in separate program areas.
Resources
Guide to Demand Response Companion Measures Guide to Demand Response Companion Measures
A guide for utility program designers on demand response companion measures.
Guide to Energy Storage Companion Measures Guide to Energy Storage Companion Measures
A guide for utility program planners on solar+storage companion measures.
Assessing Economic Value and Setting Prices
CSVP also found innovative ways to overcome barriers to successful community solar program pricing. Working directly with its utility partners, CSVP heard a call for a new, streamlined approach to economic analysis, speeding the process to move from early-stage program design to competitive program pricing. Instead of starting with a bottom-up analysis of the value of solar, the CSVP process starts with the target program price and works backward. It seeks to find just enough utility-acceptable strategic value to “fill the GAP.” The GAP (Get A Price) analysis is named for the need to fill the gap between the baseline sticker price on a solar procurement and the net value that the utility can accept. In filling this gap, the utility can create competitive pricing on the program offer by reflecting the strategic value of distributed energy resources while conforming closely enough to utility norms that the pricing can be accepted by decision-makers in a relatively short time.
The process also uses a tested, but relatively new, approach to provide benefits-adjusted power purchase agreement (PPA) pricing. The approach begins with setting a market-competitive target price, and then works to find the right amount of strategic benefits to support the pricing target. In some cases, a premium price may be anticipated, but this approach has proven to be faster and less contentious than typical value-of-solar analytics. By reflecting the added net benefits in the PPA price, rather than modifying the customer tariff, this approach is more accurate, and often more acceptable to decision-makers than common alternatives.
Using this process, the CSVP team developed three different utility-based analytic scenarios as models, all adaptable to many real-world utility situations. Presentations and webinars are available to show utility planners how the GAP analysis works and how to adapt it to meet their needs.
Resources
The GAP Process: A Streamlined Economic Analysis for Procurement ... The GAP Process: A Streamlined Economic Analysis for Procurement and Pricing of Community Solar
A presentation on the Get A Price process for procurement and pricing of community solar.
A ‘Benefits-Adjusted PPA’ Could Make All the Dif... A ‘Benefits-Adjusted PPA’ Could Make All the Difference
A blog post by CSVP’s Jill Cliburn on benefits-adjusted PPAs.
Community-Scale Solar Plus Thermal Storage and Demand-Response: ... Community-Scale Solar Plus Thermal Storage and Demand-Response: A Modeling Study of Local Grid Benefits
A modeling study of local grid benefits.
Key Takeaways
This project revealed that utilities across the country are highly interested in developing community solar programs that simultaneously meet utility and customer needs, and that these utilities can benefit from having a proven, structured approach to the development process, customer acquisition, and pricing. Companion measures, such as demand response and energy storage, can potentially increase the value of each community solar project.
As for next steps, the project team is introducing customized training and support services, to help utilities apply the lessons learned from CSVP most quickly and cost-effectively. Special areas of expertise include process management for acquiring competitive resources, planning and pricing the offer, focusing on special markets including key accounts and low-income, and fostering successful storage and demand response programs to complement solar load impacts (whether explicitly tied to community solar or not).