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 that are more closely aligned with the needs and interests of consumers and stakeholders.
In an effort to produce a range of more standardized, streamlined, and cost-effective business models that can be easily localized for different regions across the country, 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 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 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.
This report provides an overview of community solar program models through 12 key design decisions and discusses what options are most prevalent. Case studies of each model type are provided.
Key report takeaways:
In response to the need for more education, SEPA created two community solar animations to explain both upfront and monthly payment programs to potential subscribers.
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. 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 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.
This report highlights findings from two new surveys of American energy customers regarding solar energy, with a focus on community solar.
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.
As the market for community solar expands, 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. Future workshops and an upcoming final report will summarize SEPA’s findings on how to design and deploy community solar programs that will attract and retain customers and innovative models for utilities.