Getting energy from the sun is a great idea. However, installing solar panels house-by-house is slow, costly and cumbersome, and downright inefficient if the goal is to bring solar to the masses.
This problem troubled Paul Spencer after he built his own uber-efficient, custom solar home near Aspen, Colorado in 2004. The engineer and serial entrepreneur wondered how he could replicate his home many times over across the United States.
Out of this problem came the community-owned solar garden – or at least a version pioneered by the Clean Energy Collective, a Colorado company founded by Spencer in 2009. What is a solar garden? Think community vegetable garden, where everyone in the neighborhood tends a common plot and then shares the harvest. Except here the crop is solar energy, often produced by ground-mounted photovoltaic panels on an open piece of land or large rooftop.
Variations on the solar garden idea are catching on in California, Colorado, Massachusetts, New Mexico and other states.
Some models rely on virtual net metering – where utility customers receive retail power credits as though their solar panels were on their home or business. However, only a small number of states allow virtual net metering.
In another variation, the utility owns the solar panels and customers who decide to join the garden pay a premium on their bill in return for membership.
Neither of these models offer a good way to grow residential solar quickly across the country, says Spencer. Convincing lawmakers to adopt virtual net metering takes too much time and is often controversial. And under the utility-ownership model, customers don’t receive direct financial benefits from the solar panels.
His company has developed solar gardens in New Mexico and Colorado that avoid these problems. CEC’s approach foregoes virtual net metering, but allows customers to own solar panels with a good payback.
It works like this. CEC develops the solar facility and invites community members to join in the ownership, which starts at about $500-$800 per panel.
CEC sells the power from the facility to the local utility under a solar power purchase agreement, a model that attracts third-party investors because it creates certain tax benefits. A management entity, akin to a homeowners association, maintains the garden with set aside escrow monies, which is expected to produce power for 40-50 years, Spencer says.
The community garden approach gives members a chance to lower their electricity costs – they receive monthly bill credits for the energy produced by the panels. When members move, or just no longer want to participate, they can sell their panels.
This approach makes solar available to households who would otherwise be ineligible – and there are many. About 80 percent of metered utility customers in the United States cannot install rooftop solar for various reasons, according to Spencer. Their roofs are too shady or they live in apartments.
CEC’s model also helps remove utility resistance toward solar gardens, according to Spencer. A proprietary remote meter system, developed by the company, tracks the solar garden’s energy production and directly credits members’ utility bills. This removes a headache for utilities that sometimes resist the idea of solar gardens because of the tracking and crediting burden placed upon them. CEC also partners with utilities to establish fair solar power pricing for both the utility and its customers.
Will this model work? So far the company has seven facilities built or in development, with a typical capacity of one-half to one MW each. Now in talks with several utilities nationwide, CEC expects to build 5 to 10 MW of capacity this year, and six to seven times that amount in 2013.
“It is easily conceivable that community solar can contribute hundreds of megawatts of new capacity to the grid per year,” Spencer says.
Hundreds of megawatts may not sound like a lot in a country where one nuclear plant in California produces nearly 4,000 MW. But, all of the photovoltaic solar in America amounts to only about 4,400 MW. Most of that comes from large utility-scale plants. The US solar residential market added only 94 MW in the first quarter of 2012, according to the Solar Energy Industries Association.
Is the solar garden the secret to bringing efficiency and scale to residential solar? The idea has been planted. Let’s see if it takes.
Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.
We need help, suggestions is starting our own Solar Garden.
Interesting idea and an innovative go-to-market strategy. I must have missed something however.
If a community member were to ‘purchase’ a panel for upto $800, it would only make sense to participate if the member is able to recover their investment soon enough. The recovery mechanism, as explained, is in form of utility bill credit…which makes me wonder what is the payback period? At the very least several years just to break even, after that the bill credit only provides a incremental discount going forward.
The sales pitch seems a little weak here….but then I may have missed other benefits of this system!
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