Beyond Rooftops: States Move to Encourage Community Solar

The number of U.S. homeowners who have their own solar panels has been growing. But as that market slows, the industry’s focus is shifting to the huge swath of customers who can’t put panels on their own roofs; renters, people who live in places where installation isn’t feasible, and those who cannot afford their own panels.
For these would-be solar customers, the only option is to draw the power from panels set up elsewhere.
Traditional utility companies have until now driven much of the growth in these community solar, or shared solar, efforts. But while states have little control over whether utilities set up shared solar projects, many have been moving to open up the market to enable private companies, nonprofits, homeowners associations and others to develop and run community solar projects.
Across the U.S., lawmakers and regulators are determining the size and locations of projects, what types of organizations can promote and run them, and how best to ensure lower-income customers can participate.
The thorniest question states face, perhaps, is how to value the excess energy that is sold back to utilities — an issue dogging efforts to encourage the use of solar power and incorporate it into the power grid.
Fourteen states and Washington, D.C., have laws enabling third-party community solar. And some 90 percent of the explosive growth in the sector in the next five years will take place in five of them that have taken early steps to encourage the industry: Colorado, Maryland, Massachusetts, Minnesota and New York, according to GTM Research, which studies solar power and other renewable energy.
Nevada nearly became the latest state to enable a community solar program, but Gov. Brian Sandoval, a Republican, vetoed legislation in June that he said could conflict with other solar-related laws, a point disputed by the solar industry and its advocates.
Lawmakers, regulators and solar advocates in a number of other states are interested in enacting legislation to spur their own community solar industries. But community solar is a new business model in a heavily regulated industry, and it can be painstaking.
Oregon, for example, enacted community solar legislation in March 2016, but utility regulators just finished writing rules codifying that legislation in June. And the state is still working out how to value solar credits for community solar customers.
“We’re talking about an open market for energy that, by and large, doesn’t exist yet,” said Jeff Cramer, executive director of the Coalition for Community Solar Access, a trade association. “It’s really a disruptive model.”x