Washington, D.C. – A white paper prepared by the Consumer Federation of America (CFA) and released today, Public Power and Rural Electric Leadership on Community Solar Initiatives, lauded public power companies and rural electric co-ops for their leadership on community (or “shared”) solar. This third solar option – to rooftop panels and utility-installed farms – is still in its infancy but offers key benefits to consumers, especially to the roughly 50 percent for whom rooftop solar is not available.
The white paper reports that a disproportionate share of the more than 100 community solar projects have been initiated by rural electric co-ops and public power companies. This fact helps explain the U.S. Department of Energy’s “Guide to Community Solar” assessment that “in general, public owned utilities have taken the lead in deploying community solar projects.” A recent article in PVTECH concurred: “The push for community solar has largely been driven by cooperative and municipal utilities.”
Community solar involves customer investment in the purchase of power from solar panels in the same geographical area. These customers receive a credit on their monthly bills reflecting the amount of electricity they use and the amount produced by their purchase. In most cases, electric utilities or non-profit community organizations initiate community solar. Participating consumers have the opportunity not only to invest in solar power but also, typically, to obtain long-term rate stability.
Community solar offers several advantages compared to rooftop solar:
- It can be made available to everyone in a utility service area. Roughly 50 percent of all residences are not suitable for rooftop panels because of one or more factors, including insufficient sunlight.
- Because of economies of scale, community solar can be produced much less expensively than rooftop solar.
- Participating consumers are not directly responsible for the installation and maintenance of the solar panels.
- There are fewer potential conflicts between customers with solar investments and those without a solar stake.
Nevertheless, at present the total installed capacity of community solar projects – under 100 Megawatts – is only a small fraction of the installed capacity for rooftop solar – more than 7,000 Gigawatts. This huge difference partly reflects the 30 percent federal tax credit available to rooftop purchasers and leasers. But it also reflects the fact that rooftop solar has been much more aggressively marketed than has community solar. Particularly successful have been entrepreneurial companies who take advantage of the federal tax credit and net metering regulations to sell leased rooftop solar panels.
The paper notes that, if utilities and non-profit community groups could take full advantage of the federal tax credit and other incentives, including state grants, they would have greater incentive to initiate community solar projects. But the paper also notes that utilities must show much more interest in this third solar option for it to become a major power source.
“The greater interest of rural electric co-ops and public power systems largely reflects strong interest and participation of their residential customers, who also have the final say in investment decisions,” said Stephen Brobeck, CFA executive director and author of the white paper. Rural electrics, which were responsible for bringing electricity to much of rural America in the middle of the last century, are owned entirely by co-op customers. Public power companies, which provided a low-cost electricity alternative to many city dwellers starting in the early decades of the last century, are controlled by local governments, whose leaders are elected by those citizens served by the companies. The paper briefly profiles three public power systems and four rural electric co-ops that have initiated community solar projects.
Contact: Jack Gillis, 202-737-0766
CFA is an association of more than 250 nonprofit consumer groups that was founded in 1968 to advance the consumer interest through research, advocacy, and education.