Community solar program has issues, officials say
After delays, it is expected to roll out in 2025-26
New Mexico’s largest electric utilities and renewable energy advocacy organizations often disagree on energy matters, but they agree on this: Community solar is chock full of issues and delays.
It’s likely that New Mexicans won’t see community solar come online until at least 2025 or 2026, which is later than many energy companies originally anticipated.
The New Mexico Public Regulation Commission in February and March asked entities participating in or interested in the community solar program to give feedback on how the rollout of the program has been going in order to report back to lawmakers. The PRC received dozens of responses throughout April.
As part of the Community Solar Act, enacted in 2021, the PRC is required to give an update to an interim legislative committee by Nov. 1 on the status of community solar, including facility development, utility participation, low-income communities’ participation and effectiveness of commission rules.
But community solar still isn’t up and running, and likely won’t be by November. So what information does the PRC have to share with lawmakers?
Utilities and other community solar participants said there isn’t much to be said on many aspects of how the program realistically works.
But the organizations listed different problems with how the program will work, from utilities dealing with an aging and overworked power grid to renewable energy organizations worried there will be financial barriers for low-income communities.
This is the first time New Mexico has attempted to roll out a community solar energy program. The Renewable Energy Industries Association of New Mexico, or REIA-NM, represents companies that develop and install solar energy projects and said there will be lessons learned.
“REIA-NM notes that this was a pilot program, just getting off the ground. (T)here were some bumps in the road, but those can
be overcome by taking lessons learned and applying them in the second phase of the (New Mexico Community Solar Program),” REIANM wrote in its March 1 response.
‘These delays were not our expectation’
New Mexico’s three investor-owned utilities — the Public Service Company of New Mexico, Southwestern Public Service Co. and El Paso Electric — are required by law to participate in community solar.
There are delays in setting up solar gardens because the utility interconnection process is happening slower than anticipated, according to responses from energy companies the Journal reviewed. That’s resulted in companies pushing back estimated project completion times by months.
The utilities in their responses reported supply chain issues in getting equipment needed for the projects and necessary power grid upgrades. EPE said there could be delays both in the study and construction phase of the interconnection process.
PNM also said some project locations will be costly to set up, and there are capacity issues on the utility’s distribution system. SPS said developers could run into unforeseen siting and land rights issues, and the utility could see delays in administrative oversight.
REIA-NM said it’s likely a stretch that projects in PNM territory will be running by early or mid-2025, and projects in EPE and SPS territory will likely be running by late 2025 or 2026.
“Our members … have indicated that it is difficult to provide a firm timeline for ground-breaking due to lingering uncertainties, and no, these delays were not our expectation,” REIANM wrote.
REIA-NM said if there aren’t penalties or incentives to meet community solar deadlines, utilities may not be inclined to get everything going in a timely manner. All of the large utilities said the PRC shouldn’t impose sanctions for not meeting deadlines.
The energy groups and utilities also said pending PRC and court cases are causing timeline uncertainties, including a case that affects billing credit rates. The New Mexico Supreme Court also recently upheld community solar rules the investor-owned utilities challenged, but SPS is expected to seek a rehearing.
Should more solar be generated?
One of the questions up in the air for the PRC to later decide is if energy companies should be allowed to generate more solar energy later on in the program.
There’s currently a 200-megawatt cap for the pilot phase of the project.
PNM, EPE and SPS all said the PRC should wait to consider changing the cap until after projects have begun. PNM suggested keeping the current cap in place until one year after at least a quarter of the facilities are running and customers are getting bill credits.
REIA-NM pointed out that could be two or three years from now. The energy organization said the utilities’ statement “should be viewed as another delay and curtailment tactic” to setting up community solar.
“The (investor-owned utilities) are directly responsible for most of the delays in getting the selected projects online. Those delays should not be rewarded with further delays or arbitrary limitations on the next phase of the (New Mexico community solar project),” REIANM wrote.
The PRC should consider retail sales, subsidization limitation, areas in the state that would benefit from community solar and how this could help utilities meet statewide clean energy standards, REIA-NM said.
The New Mexico Energy, Minerals and Natural Resources Department said there’s clear interest for solar companies to set up the solar farms and the demand for solar benefits the state’s economy. The agency agreed the PRC should determine an annual cap based on subsidization limitations.
The agency also said the cap should be revisited frequently, a sentiment other entities echoed as well. PNM suggested revisiting the cap at least every two years.
New Mexicans aren’t signed up yet
REIA-NM said the organizations it oversees responsible for signing up participants have reported little to no activity in getting people signed up for the program.
PowerMarket, one of the organizations responsible for signing up community solar participants, said in its March 4 response it hasn’t started signups because there’s a “lack of clarity” in how the program will realistically work.
PowerMarket wrote that organizations responsible for signing up New Mexicans can’t confidently answer basic questions about the program.
“As a new program offering guaranteed savings, subscribers will have lots of questions to ensure this program is good and true, and not too good to be true,” PowerMarket wrote.
PowerMarket said every community solar market has people who think it’s a scam. Utilities should display the program online and customer service representatives should also understand the basics to answer any questions that come their way, PowerMarket said.
REIA-NM said PNM has a good community solar website that EPE and SPS should model, though there should be more information specific to low-income communities’ participation.
PNM suggested a marketing campaign, such as broadcast television, to help inform people about the program and how to participate. The utility said that would also help combat disinformation about community solar.
Potential billing issues
Some energy companies believe there could be billing barriers for low-income communities.
The program is set up with a dual billing system, which means there will be a separate utility bill and community solar subscription bill.
The Coalition for Community Solar Access, or CCSA, in its March 10 response cited a report from the National Consumer Law Center that found that dual billing is the most significant barrier to low-income and disadvantaged communities adopting community solar, especially those without reliable internet. Dual billing requires customers to add an online payment method to the separate community solar subscription bill, CCSA wrote, which is difficult for some.
In contrast, CCSA wrote that customers on consolidated billing — where only one bill exists — can receive a net credit for the subscription on their existing payment method.
REIA-NM also supports consolidated billing, and Executive Director Jim DesJardins said it’s much simpler for the customer.
“It’s less confusing. It’s easier to pay one bill than two bills,” he said.
The three investor-owned utilities didn’t support consolidated billing in their responses, writing about concerns of increased administrative burden and costs.
The utilities and energy companies submitted hundreds of pages of responses. The full responses from the utilities and energy companies can be found on the PRC’s e-docket under case numbers 24-00094-UT and 22-00020-UT.