Smart Electric Power Alliance
Highlights
- Sparked the growth of utility-led community solar models more closely aligned with the needs and interests of consumers and stakeholders.
- Identified, characterized, and analyzed options for community solar models, and produced a report summarizing how the models can best meet customer and utility needs.
- Provided technical assistance to eight organizations interested in modifying their current model or adopting one of the newly standardized community solar models.
Background
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 supporting 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. The Smart Electric Power Alliance (SEPA) worked to spark the growth of community solar models more closely aligned with the needs and interests of consumers and stakeholders.
The project team researched and compared models, conducted consumer market research, and disseminated 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, nongovernmental organizations, and consumer advocacy organizations.
Through a better understanding of customer interest and transparency regarding existing program designs, SEPA aimed to further encourage and enable the expansion of community solar deployment nationwide.
Stakeholder Engagement
The Smart Electric Power Alliance (SEPA) project was driven by a working group comprising representatives from utilities, nonprofits, and the solar industry. As part of the initiation process, the SEPA team developed a definition of community solar: 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 Models report and its updated Community Solar Program Design Models: 2018 Version, which serve as introductory resources for entities pursuing community solar programs. The reports include surveys of existing community solar programs, examining the subscription levels, development time, and administrative costs witnessed by the programs.
Market Research
Customers view community solar—which requires customer involvement in order to function—as an optional electricity product. For it to sell, subscribers need to want it. To date, there has been very little research examining what exactly subscribers want from a community solar program. The Smart Electric Power Alliance (SEPA) and the Shelton Group conducted a nationwide survey and hosted a set of focus groups designed to tease out the preferences of potential community solar customers. SEPA began this effort by hosting focus groups to discover which value propositions resonate with potential community solar customers and which trade-offs customers are most willing to make. SEPA’s market research is one of the first and most comprehensive efforts to understand consumer preferences on community solar.
The findings from these focus groups—published in the report What a Community Solar Customer Wants—indicated that mainstream energy consumers find community solar to be a conceptually attractive alternative to rooftop solar, but the lack of education on the model, 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.
In response to the need for more education, SEPA created two customizable community solar animations, designed to explain both upfront and monthly payment programs to potential subscribers.
Resources
Pay As You Go Community Solar ... Pay As You Go Community Solar Explained
This video by SEPA will help you tell potential customers how community solar works and how signing up for your program will save them money over time.
Single Payment Community Solar ... Single Payment Community Solar Explained
This video from SEPA will help you show the ease and convenience of participation in your community solar program.
Community Solar Consumer Preferences: ... Community Solar Consumer Preferences: Qualitative Research Findings
Findings from SEPA and the Shelton Group’s first phase of research involving focus groups to gauge general perceptions of community solar models.
What the Community Solar Customer Wants What the Community Solar Customer Wants
This report highlights findings from two new surveys of American energy customers regarding solar energy, with a focus on community solar.
Technical Assistance for Utilities
SEPA took the lessons learned from this research and implemented them in several technical assistance efforts with eight utilities—three nonprofits, three investor-owned utilities, and two public power utilities—interested in modifying their current model or adopting one of the newly standardized community solar models. SEPA 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 4 MW 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 and collect information on potential subscribers’ understanding of and interest in a community solar program. One high-level takeaway from these surveys was the high demand for solar ownership—over 80% of survey participants indicated an interest in community solar. This interest was clear in Fremont, Nebraska. With support from SEPA, Fremont’s new utility manager launched, and twice expanded, the town’s community solar farm within a seven-week period, selling out 1.55 MW of solar.
Key Takeaways
As the market for community solar expands, the Smart Electric Power Alliance (SEPA) will continue to share best practices for designing a community solar program based on lessons learned from their technical assistance engagements and market research. SEPA hosted a webinar featuring community solar innovations—including a presentation on Fremont, Nebraska’s community solar program, as well as other Solar Market Pathways projects—sharing the innovations, approaches, and blueprints the project teams created as they tackled policy, program development and value, and customer engagement challenges. SEPA also hosted two workshops, on in Atlanta and one in Austin, helping to distribute SEPA’s findings on how to design and deploy community solar programs that will attract and retain customers and innovative models for utilities.
Looking forward, SEPA will continue to lead the community solar working group – which has grown to over 112 participants from the original 20 at the start of the Solar Market Pathways project. This working group will serve to identify resources needed to continue the growth of community solar. They will research emerging topics such as subscriber cost/compensation that works with time-of-use rates, the threat of the Securities and Exchange Commission labeling community solar a security, creating a viable path for involving low-income subscribers, developing a common policy language, and leveraging anchor tenants to lower risk and program costs. Individuals interested in being a part of these conversations can join the working group at SEPA’s website.