Community Solar Program Billing Solved
- May 26, 2020 11:09 pm GMT
In an effort to enable those that want to support, participate in, and/or benefit from solar energy resources, but may not own the physical premise to host solar panels, utilities are embracing Community Solar programs at a fast pace. SEIA reports that the next five years will see the U.S. community solar market add as much as 3.4 gigawatts.
Community Solar serves a worthy purpose: providing affordable and renewable electricity to the 80% of Americans that can’t install rooftop solar as they are renters, have unsuitable roofs or are subject to shading that makes solar uneconomic for their premise. To realize its full potential and scale Community Solar programs, utilities must overcome unique billing challenges. These generally fall into two categories:
Challenge 1: Community Solar business models are much more complex than traditional utility tariffs and require unique billing logic to calculate accurately.
Examples of Community Solar tariff elements include:
- Solar Generation offsets (settlement) – calculating solar generation offsets using virtual NEM or NEB.
- NEM/NEB variance based on generation reporting frequency
- Developer charges may include financing, leasing, and other program charges.
Challenge 2: The business model has charges and credits coming from two entities – the utility and the community solar developer. However, customers want a single bill. In most jurisdictions, the developer and owner of the solar facility built for the Community Solar program is a third party not affiliated with the utility. This third party needs to recover its investment through payments from Community Solar participants.
Having to generate a separate bill and a second payment stream, however, generates substantial friction and impedes the success and deployment of Community Solar programs. This friction comes from investors unwillingness to support Community Solar developers that must rely on the second payment stream – particularly if that payment stream is coming from low-income customers. Further, if the Community Solar developer also has to invest in back-office systems to support billing, payments and collections, it increases the costs to all participants.
Solution: Consolidated Billing
The solution to these billing challenges is referred to as Consolidated Billing. In Consolidated Billing, the utility replaces the Community Solar developer as the billing and collection agent for the second payment stream and consolidates all billing onto the utility bill. This version of On-Bill Financing solves the problems just described.
This presents challenges that many traditional CIS Utility Billing Engines are not equipped to handle.
- If the utility is moving from monthly consumption calculations to 15minute interval settlement, the data increase is a factor of 2,280X, for hourly settlement the data increase is 720X.
- A calculation allocating the overall solar generation to each customer must be performed.
- The customer meter consumption must be settled with the allocated solar generation at the interval level.
- The allocated cost of solar generation must be included.
- All of the above included on a consolidated monthly bill for the customer.
The cost of updating an existing utility billing system to accommodate community solar participation can be quite onerous. Leading many Utilities to perform the calculations either partially or completely manually. While this may be workable while the number of community solar participants are small, indication is that community solar programs will continue to grow, requiring automation. In addition, manual calculations are prone to human error.
An Enterprise Rating Engine is a proven solution for Community Solar Billing & Settlement. An ERE works with existing Utility systems to provide a complete solution for Community Solar Billing & Settlement. It supports the big-data challenge and all the billing & settlement requirements specific to Community Solar programs. It also provides a consolidated bill to Community Solar program participants. This approach can substantially reduce the cost as well as eliminating manual billing errors.
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