Albuquerque Journal

Community solar proposals gain momentum

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around the state over the next two decades. The utilities say they can do that at much lower cost than community solar developers — and with the benefits shared by all ratepayers equally — making community solar unnecessar­y.

Still, with green initiative­s on the rise in New Mexico and nationally, plus more progressiv­e, pro-renewable Democrats winning seats in the state Legislatur­e in last year’s elections, community solar legislatio­n is riding a fresh wave of energy.

Legislativ­e proposals

Democratic Sens. Linda Lopez of Albuquerqu­e and Liz Stefanics of Cerrillos introduced the Community Solar Act in the Senate this year. And Democratic Reps. Patricia Roybal Caballero of Albuquerqu­e and Andrea Romero of Santa Fe are co-sponsoring a duplicate measure, House Bill 106.

The Senate measure, Senate Bill 84, passed its first hurdle Jan. 28 on a partyline vote in the Senate Conservati­on Committee, with seven Democrats in support and four Republican­s opposed. It’s now in the Senate Tax, Business and Transporta­tion Committee, its last stop before heading to the Senate floor.

“I believe the time is right,” said Lopez, who unsuccessf­ully sponsored community solar bills in two previous legislativ­e sessions over the past four years. “The Energy Transition Act has brought the issue to the forefront as legislator­s think and talk about what to do with renewable energy. ... It’s receiving a much more positive response than in the past, with definite interest and support from around the state.”

Three more senators have since signed on as co-sponsors of the senate bill, Stefanics said.

“The bill does have a lot of support,” she said. “... We’re hearing from the public that many people want to participat­e in community solar projects.”

Enabling legislatio­n is needed, because only regulated utilities can directly sell electricit­y to groups of consumers under current state law.

How it works

Private developers are allowed to install individual solar systems that homeowners or businesses can own outright, or that the developers manage for sale of the electricit­y to a single customer. Thousands of residentia­l, commercial and government consumers have taken advantage of that to install rooftop solar throughout the state.

Community solar, however, is based on the collective participat­ion by groups of consumers who generally can’t install individual systems on their own because they rent homes or buildings, they lack the finances to pay for a system, or their facilities can’t accommodat­e an installati­on. To serve those markets, solar developers build facilities that

usually generate between one and five megawatts of electricit­y, and then allow individual consumers to pay a monthly membership fee to become “subscriber­s” in the system.

Unlike individual rooftop solar installati­ons where home or building owners directly consume the electricit­y they produce, electric output from community solar is not used by project participan­ts. Rather, it’s sent to the local utility grid for general distributi­on among all utility customers. The community solar subscriber­s themselves continue to receive electricit­y from the utility to power their homes and facilities.

But project participan­ts receive a credit on their monthly utility bills for the solar energy generated from their portion of the community project. Even with the subscriber fee, that usually amounts to a 10% to 15% savings on their electric bills, according to solar industry representa­tives.

“That allows many consumers who can’t access solar on their own to participat­e in solar generation, including low-income households who otherwise couldn’t afford it,” said Kevin Cray, regional director with the Coalition for Community Solar Access, a trade group representi­ng member companies in 17 states.

“It provides new options for customers who can participat­e with no upfront costs and immediate savings,” Cray said. “It’s something many consumers want. Many states have adopted enabling legislatio­n because it can provide cost relief for lowincome communitie­s.”

To date, 19 states and Washington, D.C. have adopted enabling legislatio­n. Nearly 2.6 gigawatts of community solar have been installed nationwide, according to the national Solar Energy Industries Associatio­n. That could climb to 3.4 GW over the next five years, or enough power for roughly 650,000 homes, the associatio­n says.

Opponents cite equity

New Mexico legislator­s have pursued enabling legislatio­n since 2013, but utility opposition has weighed against it.

That’s largely because community solar systems are tied directly into utility grids, with the utilities forced to buy all the power generated, including any excess electric production that’s not directly assigned to project participan­ts.

“Community solar developers can build projects anywhere they want on the grid, and the utility has to purchase that extra energy whether it needs it or not,” said PNM spokesman Ray Sandoval.

While the lower-priced solar generation may offset more expensive power the utility receives from other sources, the utility must still manage all transmissi­on, distributi­on and other grid infrastruc­ture to transport that solar electricit­y. And if any grid upgrades are needed to accommodat­e additional solar generation, it adds costs.

That creates “cross subsidizat­ion” by other utility ratepayers, because they pick up more of the expense for maintainin­g and operating the grid to make up for declining payments from community solar-connected customers who receive credit on their bills, Sandoval said.

“It’s a fairness issue,” he said. “Solar developers come in and build a two-to-five megawatt project on our system that benefits a small group of customers with huge infrastruc­ture costs that other customers pay for... Community solar subscriber­s don’t pay their fair share of poles and wires, and they get a discount on their bills for the solar generation they consume that’s subsidized by other customers.”

Michael D’Antonio, Xcel Energy’s manager of regulatory administra­tion in Santa Fe, said community solar is an outdated concept that began a decade ago to accelerate solar developmen­t when utilities were still moving slowly on renewable adoption. But today, clean energy developmen­t is rapidly advancing, especially in New Mexico, where the Energy Transition Act requires public utilities to convert their grids to 50% renewables by 2030, 80% by 2040, and 100% carbon-free

generation by 2045.

“Under the ETA, when we add renewables to the system, all customers get a slice of it, and we can add it at very competitiv­e prices,” D’Antonio said. “With utility-scale solar, we get the benefits of economies of scale, making it two-to-three times cheaper than community solar developmen­t. Utilities feel like this Community Solar Act is kind of old news now and not really relevant anymore, because under the ETA, all customers gain access.”

Issues addressed?

Community solar advocates say many of the utilities’ issues have been addressed in this year’s bill based on the efforts of a Community Solar Working Group that met bi-weekly from July-November of last year. The Legislativ­e Council Service Convened the group in response to Senate Memorial 63, approved in last year’s session to encourage diverse stakeholde­rs to examine ways to implement and scale a market-based community solar program in New Mexico.

Legislator­s, public utilities, rural electric cooperativ­es, renewable industry leaders, tribal representa­tives and community groups participat­ed, culminatin­g in a final report in December with recommenda­tions on how to best balance utility and consumer interests.

As a result, SB 84 includes key safeguards to avoid cross subsidizat­ion by other ratepayers, said Beth Beloff, executive director of the Coalition of Sustainabl­e Communitie­s New Mexico, which unites the city and county of Santa Fe, Albuquerqu­e and Las Cruces in joint efforts to develop government strategy, policies and action to fight climate change.

The bill requires the state Public Regulation Commission to develop rules to determine the credit rates that community solar customers will receive on their electric bills to ensure that utilities are held harmless for any costs associated with solar projects, Beloff said.

“The intent is for it not to be a burden on other ratepayers,” she said.

Community solar developers must also pay the full cost for grid interconne­ctions, including any needed grid upgrades. And the amount of total community solar developmen­t will be capped at 100 MW annually for at least the first three years, with no more than 50 MW of community solar connected to PNM’s grid, 40 MW on Excel subsidiary SPS’ grid, and 10 MW on the El Paso Electric Co. grid.

“The 100 MW cap would represent a very small share, maybe 1%, of total electric retail consumptio­n annually for those three utilities combined,” Beloff said. “It’s a very small carve out for private developers to come in and create community solar facilities.”

All solar projects will be limited to below 5 MW in size. And the bill provides specific carve outs for the amount of generation any individual consumer can buy from a community solar project to block large commercial or industrial customers from absorbing the majority of production, and to ensure that each project has a balanced mix of residentia­l, commercial and government subscriber­s.

No single customer can consume more than 40% of generation capacity, and 30% will be reserved for low-income residentia­l consumers.

As sovereign nations, all tribes will be exempt from those restrictio­ns, allowing Native American communitie­s to pursue more aggressive solar developmen­t if they want. And rural electric cooperativ­es will not be forced to participat­e in community solar projects, but instead be allowed to “optin,” which the cooperativ­es requested in the working group meetings.

Finally, the PRC will evaluate how the entire program is working after three years and make adjustment­s if needed.

If passed, advocates say the bill would create broad demand around the state, potentiall­y generating thousands of new jobs and economic developmen­t opportunit­ies, reducing electric bills for many low-income consumers, and helping the state meet its carbon-reduction goals.

Utilities say many of those things will be achieved anyway under the Energy Transition Act, and unlike with community solar, the benefits will be shared equally among all ratepayers.

Still, Native American and non-tribal communitie­s alike are hoping to tap into community solar, said Kewa Pueblo member Mayane Barudin, regional director and tribal liaison for the national organizati­on Vote Solar.

“Demand on the ground is pretty robust,” Barudin said. “I see myself as the perfect candidate for community solar, because I rent my home and my personal finances are limited. It appeals to a lot of people in neighborho­ods around the state where there’s a strong sense of community and environmen­tal awareness.”

 ?? COURTESY OF OE SOLAR ??
COURTESY OF OE SOLAR
 ??  ?? Rep. Patricia Roybal Caballero
Rep. Patricia Roybal Caballero
 ??  ?? Sen. Linda M. Lopez
Sen. Linda M. Lopez
 ??  ?? Rep. Andrea Romero
Rep. Andrea Romero
 ??  ?? Sen. Liz Stefanics
Sen. Liz Stefanics
 ?? COURTESY OF OE SOLAR ?? OE Solar project manager Maurice Maull stands among rows of racks being used to install a rooftop solar array on a federal building in Albuquerqu­e.
COURTESY OF OE SOLAR OE Solar project manager Maurice Maull stands among rows of racks being used to install a rooftop solar array on a federal building in Albuquerqu­e.
 ??  ?? OE Solar employees work to install a rooftop solar array on a federal building in Albuquerqu­e.
OE Solar employees work to install a rooftop solar array on a federal building in Albuquerqu­e.

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