Solar for the People: Community Solar Projects

Energy, Take Action - 15th Apr 2022

Despite solar energy’s transition from a niche interest to a mainstream energy source in recent years, rooftop and utility-scale solar farm installations are only the first steps in a complex energy transition. While large solar installations funded by utilities and private businesses are already providing a significant and growing amount of renewable energy to various grids around the world, there are millions of individuals around the world who have the interest and desire to invest in solar but whose homes are not able to accommodate an engineered solar system.

Whether they live in rented homes, apartments, condos, or simply houses without sufficient space and solar exposure, there is a significant market of people who simply need the right project to invest in renewable energy generation. Community solar can provide those projects and opportunities.

How Do We Get There?

Solar gardens and other collective solar energy generation projects are large-scale solar projects which allow individuals to invest and be compensated by their utility for their share in that project.

The National Renewable Energy Laboratory’s statistics on community solar deployment in the United States show that there is room to grow for this model of solar generation. 39 out of 52 states have some form of community solar in place, and of those, 22 states have specific policies which support that model. While those numbers show that community solar has a foothold in the U.S., over 70% of community solar projects in those 39 states are installed in just four states: Massachusetts, New York, Minnesota, and Florida.

In order to achieve their high levels of community solar deployment, those states and others have implemented some form of net metering legislation, sometimes in the form of virtual net metering, as well as implementing targeted programs like Solar For All in Washington, D.C., or the SMART program in Massachusetts.

The federal investment tax credit (ITC) can also be applied to community solar projects in many cases, and electricity generated from community solar investments will be credited, without exceeding an investor’s home’s electricity consumption. As explained by EnergySage, there is also an IRS section 25D tax credit that can apply to community solar investors.

Where Did It Come From?

As solar photovoltaic (PV) technology started to show promise in the early 21st century, some early projects in California attempted to solve the issue of the limitations against full implementation of rooftop solar. For people who couldn’t afford or accommodate solar PV systems in California around 2007, a program called SolarShares allowed individuals to invest in community solar. Grassroots small-scale community solar deployments in California around this time, many serving under 100 people, were developed, but proved costly and complicated, in large part due to additional legal and accounting consultations required to develop the new model of solar generation.

In 2010, Senator Mark Udall introduced the SUN (Solar Uniting Neighbourhoods) Act, which extended an existing 30% tax credit for community solar projects, and enabled homeowner associations and groups of individuals to receive credits from their utility for community solar investments.

With those initial efforts showing the potential of community solar, some states began pointed efforts to flesh out specific policies to encourage community solar gardens and enable more flexible solar investment. Colorado was an early leader in the community solar space, and their act HB10-1342 in 2010 enacted virtual net metering and a host of specific requirements for community solar projects, which created a framework for utilities to rebate community solar investors.

As time went on, states like Florida, Maryland, Utah, and Vermont also started their own investment and policy outlines, and after some initial experiments around different communities leading up to 2010, the floodgates started to open and jurisdictions around the US were enabling community solar projects. Now, as costs per watt reach a bottom and solar’s viability and market access grow, there will be even more reason for states and countries to encourage community solar investment. As available rooftops get filled, the percentage of people who can’t host their own generation system due to cost or logistics will become a greater share of the solar market, and jurisdictions who can give those people investment channels will more job creation and clean energy investment dollars flowing into them.

How Can Sales Focus Help?

Non-profits, special purpose entities (SPE), and utilities have to deal with complex regulation hurdles and specialized systems in order to execute a community solar project and bring unserved solar investors into the market. Sales Focus can manage the sales and promotion of the project itself while the utility or nonprofit manages the internal complexities required to move the project ahead.

By outsourcing the sales of the solar shares for community solar, the cost of the sales portion of the business model is fixed. Sales Focus’ S.O.L.D. process is a proven model that onboards the Sales Focus team assigned to a community solar project quickly and allows us to customize a sales, recruiting, and training plan. An Expert Sales Team can be working in any market, at any size, in 45 days or less from commencing with Sales Focus.

Community solar projects benefit from the Sales Focus model because it frees up internal resources to deal with sensitive state and federal tax, legal, and energy regulations. The cost of spreading the word and bringing people on board with community solar is then fixed and predictable. As the project moves forward, Sales Focus can always transition a project’s sales back to its internal team when the resources are available.

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