Community Solar Delivering Value to All Utility Customers

Community Solar Delivering Value to All Utility Customers

Grid performance and reliability is the primary goal for every utility. Given an electricity delivery system that has operated for the most part on 1950’s technology, delivering on that promise is a challenging and cost-intensive endeavor. And with the rapid growth of distributed energy resources—smaller local generating power sources versus massive centralized power plants—we are requiring more of the energy grid every day.

What should not go unnoticed nor be undervalued is that with the growing popularity of community solar –  medium-scale solar facilities shared by many utility customers – comes new revenue sources for utilities and valuable developer-funded enhancements to the distribution infrastructure. These improvements are reducing pressure on rates and ratepayers to cover the costs. This result is a net-benefit to all customers in a participating utility’s territory, which in turn is an overall benefit to the community at large.

To launch a community solar project, typically a 500 kilowatt to 5 Megawatt solar PV array, a developer must first pay tens of thousands of dollars to the utility to connect the array to the grid. Because the power distribution system was not initially designed for two-way traffic, developers must then make sure the location where the facility plugs into the grid and the nearest sub-station have the proper technology and equipment to handle the new energy load coming onto the grid. As is often the case, it is incumbent on the project developer to finance any repair or upgrade deemed necessary by the utility

Many of the 45 operating community solar projects Clean Energy Collective has developed required upgrades to the utility grid such as installing a new local distribution transformer, upgrading existing transformers, upgrading utility poles, and reconditioning distribution lines. The value to participating utilities and communities has been significant. For example, grid upgrades directly funded by CEC alone now exceeds $10 million, and this amount is separate from the costs that CEC has paid for utility engineering and utility-owned equipment located at our arrays. These upgrades have a broader benefit to the grid than just handling the solar load. It helps every ratepayer on that circuit.

Local power generation is typically more efficient and passes on fewer costs from transmission losses and other factors. Some contend, though, that rooftop solar systems also reduce the pool of customers paying for these grid upgrades. Conversely, community solar is paying—directly—to improving the grid, reducing utility costs in doing so, and therefore reducing the need for rate increases.

With community solar forecasted to reach 11 gigawatts (GW) of capacity by 2020, from just over 300 MW today, the benefit from community solar will indeed be considerable.