Community systems offer alternative paths for solar growth

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With increasing demand for renewable energy, “community solar” installations are popping up around the US. They are larger than home rooftop systems but smaller than utility-scale complexes.

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MINNEAPOLIS — Strolling on the roof of his church amid 630 solar panels, Bishop Richard Howell Jr. acknowledges that climate change isn’t of most concern to his predominantly black congregation — even if it affects people of color and the poor. damages unequally.

“The violence we’re doing, the shootings, the killings, COVID-19,” Howell said weary. “You’re trying to save families, and right now nobody’s really talking about global warming.”

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Yet his Shiloh Temple International Ministries in northern Minneapolis welcomed the opportunity to become one of many “community solar” providers around the US amid growing demand for renewable energy.

Larger than domestic rooftop systems but smaller than utility-scale complexes, they are located on top of buildings, or on abandoned factory grounds and farms. Individuals or companies subscribe to portions of energy sent to the grid and receive credits that reduce their electricity bills.

This model appeals to those who cannot afford rooftop installation or where solar is not available, such as renters and owners of housing without direct sunlight.

“We are helping fight this climate war and blessing low-cost families,” Howell said.

According to the National Renewable Energy Laboratory in Golden, Colorado, about 1,600 community solar projects, or “gardens,” are underway nationwide. Most are in Minnesota, Massachusetts, New York, and Colorado, although 41 states and Washington, DC have at least one. There are relatively few in Florida but they are large enough to make the state a major producer.

Together they generate about 3.4 gigawatts – enough for about 650,000 homes – or about 3% of the nation’s solar output. But the Solar Energy Industry Association says more than 4.3 gigawatts are expected to be online within five years.

“If we build on smaller, local resources, we can have a cheaper, cleaner and more equitable system for everyone,” said Jeff Cramer, executive director of the Coalition for Community Solar Access, a trade group.

Yet it is not clear how big a role community solar will play in the US transition from fossil fuels to renewable energy.

The Biden administration is continuing the $15 million Department of Energy initiative it began in 2019 to support its growth, particularly in low- and middle-income neighborhoods. The department announced a goal in October of community solar to power five million homes by 2025, saving consumers $1 billion.

But electricity regulation happens at the state level, where interest groups are fighting over what defines community solar and who should generate it.

The Solar Energy Industries Association states that the label should only apply where private developers and non-profit cooperatives, not just utilities, can operate solar gardens and send electricity to the grid. The association says that 19 states and Washington, DC have such policies.

Utilities say multiple players can open up a regulatory framework that ensures reliable electrical service. They warn of disasters like last winter’s deadly blackout in Texas.

“You have a lot of individual profit-driven actors trying to make money,” said Brandon Hoffmeister, a senior vice president at Consumer Energy. The Michigan electricity company is fighting state bills that would allow non-utility community solar providers.

Others say that utilities are only reducing competition.

“What’s really driving the rise of community solar is the free market,” said John Freeman, executive director of the Great Lakes Renewable Energy Association, a trade group. “It saves money and promotes a cleaner environment.”

growing pains

Community Solar took off in Minnesota in 2013 after lawmakers required Xcel Energy, the state’s largest utility, to set up a program open to other developers. It has more than 400 gardens – the tops in the US – with about 500 applications pending.

Keith Dent and Noy Koumalasi, who are married, say that subscribing to Shiloh Temple Gardens has reduced their bills by an average of $98 a year.

“You’re generating your own electricity and saving a little money,” said Dent, who helped set up several campuses built by Energy Futures, a local non-profit cooperative.

Required to buy power for gardens, Xcel says the state’s formula for valuing solar power makes it too expensive. The cost, spread among all of the utility’s customers, essentially forces non-customers to subsidize community solar, said spokesman Matthew Lindstrom.

Community Solar backers say Xcel’s claim overlooks the savings from local gardens’ lower distribution costs.

The Cooperative Energy Futures Garden has 3,760 panels on the parking deck in front of Twins Baseball Stadium and a collection on a farm near Faribault, 50 miles (80 kilometers) south of Minneapolis.

Although conflicted about taking six acres off production, farmer Gerald Bauer supports climate causes and says lease payments of $1,200 per acre make Community Solar a financial winner.

“Farming doesn’t even come close to the revenue that solar generates,” he said while walking through the rows of panels made by cornfields.

A cooperative project for a municipal roof in nearby Eden Prairie would have twice as many clients as panels.

“There are people in the community who want to support clean energy in some way,” said Jennifer Hassebroek, sustainability coordinator for the suburban city.

But community solar developers are hitting a hurdle: Under state law, residents and businesses can only subscribe to facilities in their county or nearby.

This means that the heavily populated twin sites have many potential customers but lack space for gardens. Rural areas have plenty of space but fewer buyers for energy.

“Instead of spreading across the state, we’re going to focus on counties that are adjacent to subscription demand,” said Reed Richerson, chief operating officer for Minneapolis-based US Solar Corp. states.

A bill from State Rep. Patty Accomb, a Democrat who represents the Twin Cities suburban district, would drop the “contiguous county” rule.

But Axel says this contradicts a basic community solar principle: producing energy close to where it is used.

Community solar power is billed as making renewable energy more available to homes, especially those in need. Yet businesses and public institutions with sustainability goals, such as schools and city halls, subscribe to most of the power.

Some states are trying to change that.

New Mexico requires that at least 30% of each community solar project’s customers are low-income customers. Colorado, Maryland, New Jersey and Oregon reserve some of the energy for low- and middle-income residents. New York offers developers a financial incentive to recruit them.

“There is still much to be done to open up access to the community solar market to marginalized people,” said Gilbert Michaud, assistant professor of public policy at Loyola University Chicago.

looking ahead

Community Solar is struggling in states with no established systems.

There are about a dozen projects in Michigan, though Consumer Energy opened a 1,752-panel garden on the grounds of an abandoned factory in Cadillac this summer.

Conservative Republican Michelle Hoitenga and Progressive Democrat Rachel Hood are sponsoring House legislation to establish a state-regulated program for third-party energy providers and utilities.

Hoitenga says it will boost independence and the economy without raising taxes. Hood emphasizes climate benefits and equitable access to renewable energy.

But his bills have been opposed by Consumer Energy and DTE Energy, two of the state’s biggest utilities. DTE Energy spokesman Pete Turns said they would cause “overproduction of energy … and eventually higher rates”.

Rachel Goldstein of consulting firm Wood McKenzie said prospects are brighter in states friendly to non-utility developers, such as New Jersey, Maine and Illinois.

She forecasts a 140% nationwide jump in production capacity by 2026, although growth may depend on the lifting of constraints such as project size limits.

Community solar likely won’t rival home rooftop installations anytime soon, Goldstein said, much less a utility-scale operation approach.

“It’s not realistic to say we’re going to solve the climate crisis with this and everyone’s going to be a millionaire,” said Timothy Denherder-Thomas, general manager of Cooperative Energy Futures. “But we can say that you will have a better life, more economical and cleaner life.”

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