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Community Solar Is Democratizing the Future of Energy (While Saving Consumers Money)

image credit: Solar Simplified
Aviv Shalgi's picture
CEO and Cofounder Solar Simplified

Aviv Shalgi is a serial entrepreneur, and the CEO of energy tech startup, Solar Simplified. His military background, engineering career, and consulting experience have allowed Aviv to become a...

  • Member since 2021
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  • Nov 10, 2021
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Would you like to save money on your electric bill while also helping the environment? Of course you would (you’re not a monster). Anybody with a budget and a conscience would.

So why haven’t a greater share of Americans enrolled in community solar energy projects? After all, the community solar model presents a clear path to individual savings and more sustainable energy sourcing. 

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Simply put, community solar has democratized renewable energy. It disperses cost without diluting benefits.

Our Consumer Perceptions of the Solar Industry helped us identify a few reasons why consumers have not embraced community solar at the rate that you might expect. Our findings also suggest that with further education, participation could increase in a significant way.

80% of consumers are not aware that community solar is an option for them. Rather, they believe that rooftop solar panels are the only way to access the benefits of solar energy. Furthermore, they’re wary of rooftop solar for a number of reasonscost, skepticism of return on investment, and lack of trust in solar providers to name a few. 

Community solar models allay each of these concerns. 

Community Solar Takes Costs and Panels Off-Site

The term “solar farm” is central to community solar projects. These farms contain massive banks of solar panels positioned in areas with maximum solar exposure. 

Utility companies, private groups, non-profits, and others pay the upfront cost of building these farms. Federal grants from the U.S. Department of Energy are readily available to alleviate such direct costs. 

Contrast this with the image most consumers have of solar energy: rooftop solar panels. The economic proposition could not be more different.

The homeowner or business owner generally pays the cost of installing rooftop panels (a cost which can be significant). Sun exposure may be less than ideal, and they may only have one or two panels installed. Not only is the individual paying a high upfront cost, they may not see a return on that investment for quite some time.

Maintenance also generally falls on the panel owner. There is nothing democratic about this model.

We know that the perceived cost of solar energy participation scares consumers away. 27.5% of survey respondents cited upfront costs as a deterrent to installing solar panels.

Community solar takes these costs, as well as the other downsides of in-home or in-business solar panels, off-site. 

Community Solar Harness the Power of Numbers

With community solar projects, the massive number of panels on a solar farm enhances the total amount of solar energy provided. Sure, each consumer is sharing that total energy with other consumers, but there is more than enough to go around.

Here’s the question: would you rather pay a fraction of the cost to share a hyper-efficient, grand-scale solar farm, or pay the entire cost of a (potentially inefficient) panel or two?

Community solar participants are choosing the former. They and countless other solar project members, along with the solar farm host and federal government, share in the cost of the infrastructure. And yet, they receive tangible, near-immediate benefits from their fractional investment.

As U.S. investment in solar infrastructure continually grows, it makes economic sense to invest in solar farms at scale. At least 19 states and the District of Columbia are actively promoting “shared renewables” including community solar.

Utility companies are taking advantage of tax breaks issued in the name of reducing carbon emissions. Policy-driven migration towards renewable energy means solar-powered savings for consumers.

The more economic incentive there is for solar farms, the more farms emerge, the more solar energy is harnessed, and the cheaper solar energy becomes for consumers. Consumers are seeing these real benefits in the form of energy rebates. 

26.1% of survey respondents said that they don’t believe solar panels will save them money. We instead say that with community solar, they could save as much as 10% on their energy bills through energy rebates. 

Community Solar Is Lowering the Cost of Clean Energy (and a Clean Conscience)

The desire for effective solar energy is there. The dam is ready to break when it comes to consumer participation in community solar.

77.3% of respondents said that they believe solar panels could reduce their monthly energy costs. And yet, the upfront cost of rooftop panels seems prohibitive.

Just shy of 80% of respondents said they believe solar energy would lead to a cleaner environment. Yet, various hurdles—cost, appearance, mistrust in efficacy—have stopped consumers from taking the solar leap.

If only consumers knew that those perceived hurdles were not real. Here’s what we mean:

What is the cost to enroll in community solar programs? Nothing.

Do community solar participants pay directly to purchase or install panels? No.

Do consumers have to put solar panels on their home or business to receive solar energy rebates? No.

Can community solar provide individual consumers clean energy and a lower energy bill? Yes.

So, where exactly do those roadblocks to solar energy lie?

Conclusion

Community solar has overcome its greatest challenges. Strong funding initiatives like SunShot are making solar a truly competitive energy source. Utility companies, private investors, non-profits, and others are investing in massive infrastructure.

The foundation is in place for a future energy economy built in large part by solar. And, consumers who have bought into community solar are seeing notable savings on their energy costs.

Now comes the need for further education. 

Our findings revealed archaic views about solar. Consumers aren’t generally aware that solar farms can serve them. They are wary of solar energy’s efficacy, as well as hidden costs associated with the technology. 

These views are no longer well-founded. Community solar takes advantage of top-down funding and passes savings along to the consumer. As more consumers come to see this reality more clearly, participation in solar energy projects should surge. 

The future of solar energy is bright. Put on your shades and claim your rebates.

 

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Matt Chester's picture
Matt Chester on Nov 10, 2021

Are you seeing these community solar projects being paired with energy storage? It's definitely beneficial to democratize the capital costs and batch together land requirements, but I imagine it doesn't solve for the energy market challenges that unpredictable levels of sun can bring-- but perhaps with a large enough connected battery system that could be at least somewhat smoothed (to the same benefit of the participants)?

Aviv Shalgi's picture
Aviv Shalgi on Nov 10, 2021

Thanks for your question, Matt. Generally speaking, we're starting to see more and more storage components being added to Community Solar projects. However, energy storage is still in its infancy, essentially where solar panels used to be 20-30 years ago, and the efficiency and cost aren't at a place that makes sense for most projects. With that said, a few years ago these aspects didn't make sense at all, so the technology is advancing quite rapidly. I hope that we'll get to an economically viable solution in the near future, such that all new Community Solar projects will have a storage component. 

Nathan Wilson's picture
Nathan Wilson on Nov 10, 2021

Aviv, the most important factor in the viability of community solar is the issues of subsidies and policy support.

 

The latest data from the DOE's Berkeley Labs for utility-scale and residential shows that residential pricing, around $3.8/W_DC is enormously higher than that of utility-scale, at $1.1/W_DC, and the capacity factors can be expected to be worse as well, given that most utility system track the sun and rooftop systems don't.

 

The fact that residential system installation continues to thrive in spite of the high cost is due to the very generous cost-support program that most locations seem to have: net-metering.    With this system, residential PV only has to compete with retail pricing, not the much lower wholesale price that is the target for utility system.  That is a great system for the installers and system owners, but society as a whole, and the poor in particular are the losers.

 

So what about community solar?  Unsurprisingly, the Berkeley reports show that costs for large non-residential systems are in-between that of residential and utility, at about $2.2/W_DC.  If it lets participating consumers "save money" relative to grid power and utility solar, then it must also involve some sort of cost-shifting and must also drive up the total cost to society.

Bob Meinetz's picture
Bob Meinetz on Nov 26, 2021

"That is a great system for the installers and system owners, but society as a whole, and the poor in particular are the losers."

Nathan, I have little to add to the relevant points you make, other than warning readers that oil interests promoting "democratizing the future of energy" are only interested in forcing developing countries to remain dependent on unreliable, intermittent energy - and the climate-killing fuels they sell to back them up. More colonialism, than democracy.

Beware: the oil/gas industries have never put honorable social or environmental goals ahead of profit. Never have, never will.

Mark Silverstone's picture
Mark Silverstone on Nov 23, 2021

Perhaps equally important is the role community solar must play, along with wind where applicable, in developing countries.

Our only hope of meeting COP26 goals is to provide alternatives to costly, unreliable coal power in countries like India, South Africa, parts of China and other developed/developing countries, especially largely rural areas, that lack the resources  to establish  functional centralized energy systems.

If the economics work in the US, they will work even better in those countries and regions. Unfortunately, there are strong forces who are against "Democratizing the Future of Energy".  There is too much money at stake.  Let´s hope that "with further education, participation could increase in a significant way". It will also take sustained political action to make it a meaningful reality.

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