This is why “community solar” is really taking off, and the latest feature from Bloomberg is really getting people excited. Shared solar panel projects are popping up all around the country, giving a wider range of people the benefits of solar power. The only things we need to complete this perfect equation is community home batteries.
The Year of Community Solar
Let’s say you’re a renter, or the owner of a home without a solar-friendly roof. You’re probably feeling left out of the solar panel boom that’s sweeping across the globe. That’s why people are finding ways to collaborate with their communities to launch collaborative solar panel projects that can benefit more than just one individual housing unit. Many are predicting that 2016 will be a big year for “community solar,” and that we’ll be seeing a huge increase of people getting together with their neighbors, and getting into renewable energy.
Though community solar is just getting started, researchers are saying that it will grow rapidly as the use of solar panels becomes more and more mainstream. New business models are finding new ways to make solar power available to customers that otherwise wouldn’t fit the target market for solar installations. So far, solar photovoltaic companies have been looking at wealthy, progressive, Californian homeowners to jump on the growing solar energy revolution. It’s been a huge success, especially as education about the benefits of solar power becomes more mainstream. But now is the time for the solar panel market to grow.
Community solar projects are working on educating and financing solar projects for a wider range of customers. Community solar programs are targeting renters, and others who don’t own roofs suitable for solar panels, either because of the roof’s integrity, or the amount of sunlight available. “Everyone with an interest in solar can now participate,” said Eran Mahrer, director of utilities for First Solar Inc., the biggest U.S. solar panel maker. Supporters of community solar also see these programs as ways to provide solar electricity to lower-income residents. Low-income housing communities are often the most vulnerable in the case of power outages, especially blackouts that are longer in duration. Making solar electricity available to these customers could provide great energy resiliency, especially if used alongside energy storage like home batteries.
A Wave of Community Solar in Massachusetts
Massachusetts recently received a huge boost to their community solar market when Morgan Stanley committed $100 million to BlueWave Capital, a solar development company, to build up community solar in the state. By the end of 2016, BlueWave is expected to build more than 25 megawatts of community solar with the help of MS Solar Solutions’ investment. If things go well, Morgan Stanley may look for opportunities to invest in other states. BlueWave is based out of Boston, but has offices in South Carolina, North Carolina, South Africa, and the Bahamas.
Projects like this are expected to completely transform solar into a mainstream market, with a 59% compound annual growth rate between 2014 and 2020. Massachusetts is emerging early as a leader in community solar, but California, Colorado, and Minnesota are picking up efforts as well. In the next few years, many other states are expected to quicken the pace. There are already 24 states with at least one community solar project in the works.
Shared renewables are getting more and more attention as time goes on, but they won’t be able to reach their full benefit unless coupled with energy storage systems like home batteries. Home batteries allow solar electricity users to store the energy produced by solar panels, an essential option in a world where the sun isn’t always shining. Home batteries and other energy storage options fit seamlessly with a variety of shared renewables models.
Renewables are Better When Shared
There’s more than one way to share solar. “Community Solar” refers to solar projects that are owned by communities, as well as solar installations that are owned by third parties, who share electricity with a larger community. Since the purpose of community solar is to share the benefit of solar power with customers that are not able to install panels on their own property, different communities are exploring different ways to make solar power work for them.
Some communities purchase solar panels together as a group, in order to get discounts or lower rates from a solar installation company. Though this may provide a cost benefit to solar panel customers, it is distinct from a community solar project. In true community solar endeavors, the same solar system is owned and used by the group, and is located on land separate from where each customer actually lives. (This land may or may not be owned by those participating in the project.)
There are also crowdfunding and investment opportunities that allow anyone, anywhere to invest in solar power installations, but in the case of these investments, the investor is not actually using the solar panels, but simply looking for a monetary investment return. Again, this is different from community solar projects, since project participants actually use the electricity generated from the solar plants they pitch in to buy. The return on their investment comes from the use of clean energy directly from the sun (which is, and will always be, free.)
The financial benefit of community solar for participants is pretty significant. Even those who are not in the market for rooftop solar can now benefit from solar systems through Virtual Net Metering, which is now available in a growing number of states. Just like net metering for rooftop solar installations, Virtual Net Metering allows households to receive credits from the solar energy project they are associated with, even if they don’t share an electricity meter with the system. They can use these credits to receive electricity from the power company when the solar panels they rely on are not generating the power that they need. Basically, community solar users get to reap the benefits of selling extra, unused electricity from solar panels back to the power grid, getting credits that are added to their bill.
Receiving credits through Virtual Net Metering is a plus, but many are deciding to store excess power themselves in home batteries, rather than sell it back to the power companies. This lets customers enjoy greater independence from a pretty vulnerable power grid (read more about that here (link to koppel article)), and also ensure that they are getting the best value they can out of the electricity generated through the panels they own, or co-own with their community. Here’s what we mean by that: though solar panel owners can receive credits toward their bill for unused electricity, these credits are not always equal to the cost of electricity per kilowatt. This is especially true if customers are charged additional fees when they use grid electricity during peak demand hours, like the early evening. Peak demand periods are times when the most people need the most electricity, and they are often also periods when solar panels are not generating as much electricity because they sun is on its way out. Because of the high demand for electricity, the cost is higher as well in many areas. In a nutshell, solar customers are selling their excess energy back to the grid, then buying it back later in the evening… at a higher rate. When you look at it this way, storing electricity in home batteries makes a lot of sense… and a good amount of money, too.
Why Community Solar Needs Community Storage
We already mentioned that community storage participants can save money by using home batteries to store the excess electricity generated by their solar panels. But there’s more. By using energy storage, like home batteries, those who are in on community solar projects can minimize their dependence on the power grid, or cut ties and break free from the grid entirely. There are more reasons why this is a really, really good idea.
The power grid is vulnerable -- more vulnerable than most people realize. Everyone has had the experience of a power outage, and knows what a hassle it is to work, cook, and live at home without electricity. What’s less common is a prolonged power outage, one that lasts more than a day or two. The effects of prolonged outages can bring things from inconvenient to life-threatening pretty fast. And the power grid? It’s actually pretty susceptible to prolonged outages. That’s why energy storage is so great. Think about this: households independent from the grid wouldn’t even notice a grid outage.
Households equipped with solar panels and energy storage in the form of home batteries are completely protected from any utility company mishap, whether it be on a large or small scale. Home batteries allow households to power their own essential appliances like refrigerators, water pumps, and heating/cooling devices with stored electricity collected from renewable energy sources like solar panels. The grid may be vulnerable, but the sun? Not so much.
Energy storage changes the entire conversation about grid vulnerability. We don’t have to talk about prolonged power outages as a impending probability, but a situation that can be avoided altogether. Home batteries put the power back into the hands of the consumer, or groups of consumers in the case of community storage.
As more communities look for ways to get together to share renewable resources, it just makes sense for them to look for ways to store them as well.