Community solar projects are growing in popularity
For four generations, Steve Wine’s family has tended a 600-acre farm in Virginia’s Shenandoah Valley, raising steers and growing corn, soybeans and alfalfa. The farm has struggled in recent years with rising costs and slumping crop markets, leaving Wine to question the operation’s viability.
In a bid to sustain the farm, Wine will begin in the coming months to harvest a new crop: solar energy. He’s leased 34 acres to a solar electricity developer, which has installed panels that will generate about 5 megawatts of power at peak capacity. The project is funded by subscriptions from about 1,000 households in the region, who will receive credits on their electricity bills based on the power it generates.
“This is a fixed income that we know is going to be there,” Wine said. “I love farming, and this was an option we had to help lighten the burden.”
The energy model, known as community solar, is growing across the country. It allows people who rent homes or who can’t install rooftop panels on their own properties to subscribe to midsize solar projects on nearby farms, schools or bigbox stores.
While subscription methods can vary, industry groups say a typical monthly subscription of $120 to $135 can end up saving participants $15 to $30 a month. For many, the savings can amount to 5% to 20% of their electricity bill.
For property owners who host the solar panels, leases can be worth about $30,000 a year, according to one developer.
Backers say community solar can play an important role in expanding clean energy, and give low-income households relief on their energy costs. Although definitions can vary, the industry trade group Coalition for Community Solar Access says 20 states have policies that enable “true” community solar, which requires utilities to credit the electricity bills of households that subscribe to solar projects that aren’t built or run by the utilities themselves.
This year, lawmakers in at least 10 states have put forward bills that would enable or expand community solar programs, driven in part by federal funding opportunities from the Inflation Reduction Act. Citing consumer choice and affordability, a growing number of Republican lawmakers have sponsored such proposals, including in seven of those states.
But some bills have stalled amid strong opposition from utilities, which have argued that community solar programs don’t account for costs such as billing overhead and distribution fees, which are passed on to non-subscribing ratepayers.
“All the other utility customers can’t subsidize the benefits of those who are subscribing to community solar projects,” said Zach Hill, lead public and community affairs manager at Alliant Energy, a Midwestern utility that has opposed legislation in Wisconsin. “There’s no consumer protections [in the bill].”
Earlier this year, Virginia lawmakers passed bills to expand the state’s community solar program by 200 megawatts, enough to power more than 30,000 homes, and to bring projects into new areas of the state.
As Virginia’s program expands, other states are looking to establish their own. The Pennsylvania House advanced a bill earlier this year that would create a community solar program in the state. Sponsored by a mix of Democrats and Republicans, the measure was recently referred to a Senate committee.
Some utilities in Pennsylvania have worked with lawmakers to shape the proposal. Brian Ahrens, senior communications specialist with PECO, the state’s largest electric and natural gas utility, said the company is generally supportive of the measure but concerned about an amendment that would prevent utilities from recovering costs such as distribution expenses related to community solar. PECO aims to stay engaged in discussions as the bill heads to the Senate, he said.
“This is something we’d like to see, and it’s a benefit to our customers,” Ahrens said. “We want to ensure that [projects] are paying their fair share of the costs needed to tap into our distribution system.”
Many of the state proposals this session have been sponsored by Republican lawmakers, including those in Georgia, Iowa, Michigan, Missouri, Ohio, West Virginia and Wisconsin.
“The trend in the last few years has been more and more red states taking up these bills,” said Brandon Smithwood, vice president of policy at Dimension Renewable Energy, an Atlanta-based developer that has built community solar projects in 11 states. “There’s an appetite for these smaller, locally controlled projects that can yield savings to customers.”
In Washington state, Democratic state Rep. David Hackney this year introduced a community solar bill that quickly ran into opposition. He conceded that utilities in the state raised legitimate consumer protection concerns that would need to be resolved before the issue could advance next session.
“The idea of community solar is still alive,” he said. “The hard work of legislation is coming to an agreement that’s acceptable to both sides.”
Among the utilities’ concerns was the possibility of incompetent or fraudulent developers exploiting their subscribers, with the utilities left to face the customers’ wrath.
“It was going to be us that they would come to, because we’re the ones putting those charges and credits on their bill,” said Heather Mulligan, manager of customer energy renewable programs with the utility Puget Sound Energy. “We’re very open to continuing the conversation and finding ways to support the development of community solar in a way that ensures there is oversight of all parties participating.”