As shared investment strategies and net-metering policies are evolving, so too are financial incentives that spur investment in community-based renewable projects. Shortly after shared-system net-metering was allowed in Maine, the state Public Utilities Commission (PUC) issued a draft rule allowing community projects a choice of incentives: a long-term standard energy supplier contract for the generation or a renewable energy credit (REC) multiplier in which the value of the REC is 150% of the amount of electricity produced (Colorado also offers such a multiplier).
A REC allows the environmental value of the renewable generation to be quantified and provides the owner a commodity-like product that can be traded. PUC's proposal sets a contract price for solar that averages $0.10 per kWh, not including the purchase of RECs.
Resolving Community Solar Complexities
Despite the promising success of utility-owned models, community and virtual net metering is burdened with administrative, legal and regulatory hurdles.
Administratively, if a utility is set up to record and bill only one meter for one account, new billing software is needed to aggregate net-metering credits across accounts, whether for a single customer generator with aggregated meters or for multiple accounts aggregated in a single net-metering arrangement.
Fortunately, this upgraded billing software could coincide with developing smart-grid and smart-metering programs. Some community net-metering arrangements impose further administrative burdens by making a single point of contact responsible for managing the billing interactions between the utility and the group of customers sharing the net-metering credits.
The geographic boundaries that define the "community" for purposes of aggregating meters and accounts can lead to concerns about if and how it's appropriate to compensate the utility for wheeling power. To avoid this, some community solar programs are limited to physically adjacent properties, or they remove the distribution portion of the net-metering credit. But adding more intricate rules for community solar may further complicate the policymaker's job. Utilities that have come around to traditional net metering, where one customer here or there goes virtually "off the grid" may be more reluctant to see blocks of customers buying a lot less electricity.
While the success of community solar so far has been limited to programs operated and owned by municipal utilities, the new frontier appears to be at investor-owned utilities. IOUs are seeking new ways to comply with renewable portfolio standards and to indulge customers' appetite for solar. Regulators may favor IOU-owned models over private, third-party shared-investment arrangements, because utilities are in the business of distributing power. And utilities may more easily embrace community solar where they own the generation assets. Only time will tell if the solar time-share will become more available, but the future looks bright.
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Case Studies in Community Solar is on the agenda at Solar 2010 in Phoenix, May 17-22.
Dana Hall is energy policy coordinator at the Pace Energy & Climate Center.
James Rose is senior policy analyst for the Network for New Energy Choices.
Laurel Varnado works at the North Carolina Solar Center.
FROM Solar Today (March 2010), a SustainableBusiness.com Content Partner.
