This guide is designed as a resource for those who want to develop community solar projects, fromcommunity organizers or solar energy advocates to government officials or utility managers. By exploringthe range of incentives and policies while providing examples of operational community solar projects,this guide will help communities to plan and implement successful local energy projects. In addition, byhighlighting some of the policy best practices, this guide suggests changes in the regulatory landscapethat could significantly boost community solar installations across the country.

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File Format: PDF
Source: Solar America Communities

This guide is a comprehensive resource that will help communities accelerate their adoption of solar energy technologies. Additionally, the guide is intended to help communities better understand the steps necessary to permit and license solar energy installations and how to streamline those processes, which can deliver significant savings in the total costs of installing solar systems.

Solar Powering Your Community: A Guide for Local Governments also offers guidance for communities on how to develop a plan for expanding the use of solar energy and ways for local governments to tailor their approach to implementing solar projects based on their community and local circumstances.

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Source: US DOE

This report provides a comprehensive summary of installed cost trends for grid-connected solar photovoltaic (PV) systems in the United States from 1998 through 2009, and provides preliminary cost trends for systems installed in 2010.

In addition to describing temporal trends, the report also describes trends in installed costs by system size; by component; between the United States, Germany, and Japan; among individual states; between customer-owned and third party-owned systems; and among customer types, applications, and technologies. The report also describes trends in financial incentive levels over time, by customer type and among states, and the associated impact of those trends on the net installed cost of PV for residential and commercial PV system owners after receipt of incentives.

The report, along with a PowerPoint briefing and associated data file, can be downloaded from: http://eetd.lbl.gov/ea/emp/re-pubs.html

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Source: LBNL

This CESA report provides an overview and specific examples of three creative finance tools that any state can use to support PV in the context of an existing RPS: solar set-asides, feed-in tariffs, and reverse auction mechanisms. These tools are primarily targeted at commercial- and utility-scale projects, and use of any of them can reduce the need for states to provide direct rebates and incentives to PV projects. These tools, if smartly designed, can allow states to build sustainable solar markets with programs that are economically efficient, reward PV system performance, allow for program continuity, advance market transformation and avoid rebate dependency.

The authors contend that providing special treatment to PV projects in the context of an RPS is important if states are to build and maintain public support for their RPS programs, particularly in cases where solar is the most widely accessible in-state renewable energy resource.

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Source: Clean Energy States Alliance

The New Solar Homes Partnership (NSHP) is part of a comprehensive statewide solar program known as the California Solar Initiative (CSI).The NSHP implements the Energy Commission’s portion of the CSI and provides financial incentives to encourage the installation of eligible, solar energy systems on new residential construction. The Energy Commission will work with builders and developers to incorporate high levels of energy efficiency and high-performing solar systems to help create a self-sustaining solar market.

 The NSHP seeks to achieve 400 megawatts of installed solar electric capacity in California by the end of 2016.

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File Type: PDF
Source: California Energy Commission

For more information, please see their website by clicking here.

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Source: California Public Utilities Commission

Over the past decade, states have played an increasingly important role in providing financial support to renewable energy projects, with funding often derived from state-established public benefit funds. The financial support tools for renewable energy projects have ranged from rebates to competitive grants to loans. Complementing these tools has been a set of public policies— tax incentives, net metering and interconnection rules, renewable portfolio standards—passed by state legislatures and regulators. Recently, the American Recovery and Reinvestment Act (ARRA) also provided significant funding to states to support clean energy investments.

The purpose of this report is to describe the many financing options available to state energy offices, municipal governments, and other energy agencies for utilizing public funds for clean energy project support. The report analyzes their strengths and weaknesses and identifies best practices. One key finding is that, while each tool has its own strengths and weaknesses, the use of these tools as a portfolio of approaches creates the most robust, effective programs.

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File Souce: Clean Energy States Alliance

Connecticut Solar Lease Program

The groundbreaking introduction of a state-sponsored solar leasing program has drawn national attention and an onslaught of additional leasing programs and financing options have developed as a result. The Connecticut Solar Lease Program is a Connecticut Clean Energy Fund (CCEF) initiative that was begun in 2008 and designed to eliminate the high upfront capital cost associated with solar photovoltaic (PV) system installations.  One of the  first of its kind in the nation, CT Solar Lease Program uses a combination of rebates and tax credits to help moderate and low income residents in the state gain access to clean, renewable solar energy.

The Connecticut Solar Lease Program addresses affordability issues for homeowners interested in installing residential solar energy systems. Eligible Connecticut homeowners—those residents whose household income is 200% or less of their area’s median income and meet the credit qualifications of the program—have the opportunity to install a cutting-edge solar system on their home with no down payment required and a low fixed monthly payment.  

While electricity prices are projected to continue to rise, the monthly CT Solar Lease payment will remain constant. In addition, homeowners enrolled in the program will benefit from the Connecticut Clean Energy Fund (CCEF) Solar Rebate Program. Because CT Solar Leasing owns the solar PV system, it can take advantage of business tax incentives, further reducing the cost of the system on the homeowner. To procure a system, homeowners work with an eligible solar installer of their choice; over twenty installers have been pre-approved by the CCEF and CT Solar Leasing. Lessees also receive Solar Dividends, allowing them to share in the sale of the panel’s generation of Renewable Energy Credits (RECs) where 1 REC is earned for every megawatt (MW) of electricity generated by the system. The money from the earned RECs goes into an account that lessees can use towards paying for a new inverter or towards the cost of system removal. Homeowners receive full use of the system for fifteen years at a fixed cost, with the option to buy. At the end of the fifteen year lessees have the option to buy the system from CT Solar Leasing at its current value, extend the lease for an additional five years at a reduced monthly rate, or have the system removed at their own expense with no future obligation. For more information on The Connecticut Solar Lease Program click here. 

Table 1 – CT Solar Leasing – Estimated Costs Table (click here for source)

The uniqueness of the CT Solar Lease Program encompasses several factors. To start, it is the first time that a ratepayer funded organization such as CCEF has partnered with financial institutions to leverage federal business tax credits in order to make renewable energy more affordable.  Secondly, the CT Solar Lease Program’s financial model is especially innovative because it was designed to allow valuable benefits to the customer such as low fixed payments and zero down payments.  Thirdly, the financial model also allows funding to come back to the program leveraging CCEF’s investments and benefitting Connecticut ratepayers.

(The PV Peer Network featured the CT Solar Lease Program as the focus of one of its webinars on Sept. 19, 2008. The webinar materials and audio file from the event are located on the PV Peer Network page of this website at http://www.statesadvancingsolar.org/state-activities/pv-peer-network.)

Electric utility companies have recognized the increasing importance homeowners and businesses are placing on clean, accessible, and affordable renewable energy.  Since the introduction of Connecticut’s program, many private companies have unveiled leasing programs for both residential and commercial markets.

SolarCity Lease provides affordable solar leasing options for businesses and homeowners in California, Arizona, and Oregon. Similar to CT Solar Lease, SolarCity offers leasing options for no money down and low monthly payments. The flagship company partnered with U.S. Bancorp Community Development Corporation to ensure the financing of Power Purchase Agreements (PPAs) for a wide range of potential lessees. The company supplies financing, design, installation, monitoring, and maintenance for all of its solar leasing clients. Utilizing cutting edge proprietary software, SolarCity is capable of analyzing potential solar production, financials and environmental impacts for each client, managing thousands of concurrent projects, and automating key processes to further cut costs. The company is able to finance small commercial spaces as small as 20 kilowatts, to systems that generate upwards of 1,000 kilowatts or more. As of July, 2009 SolarCity had struck leasing agreements with over 3,500 homeowners, businesses, and schools.

SunRun PPA has a similar model to that of SolarCity and operates within California, Massachusetts, and Arizona. SunRun is the first company to strike an agreement with a local utility company, the Los Angeles Department of Water and Power (LADWP), which has resulted in even lower cost leasing options for SunRun customers within the Los Angeles area.

FreEner-g, a newcomer to the scene, is a Minnesota leasing company starting a program out of the Twin Cities area. FreEner-g has marketed itself as an eco-venture with a triple-p approach: people, planet, and profit. The pilot project is being partially funded through customers of Xcel Energy through a $1.5M grant from the Xcel Energy Renewable Development Fund. The Solar Assessment phase of the project began in August of 2008; currently, frEner-g is in the midst of the Solar Installation phase. By installing approximately fifty solar systems on homes and small businesses, freEner-g plans to deliver 280 kilowatts of installed solar capacity throughout the Twin Cities.  

Urban Electric Company recently announced their plans to create a Solar Equipment Lease program in the Philadelphia area. Like all companies whose state law requires net metering, Urban Electric Company solar system meters track the net difference between energy flowing in and out of the home and utility companies compensate for excess power fed back into the system.

While the above sampling of companies providing solar leasing programs vary in specific financing options and lease lengths, all the providers have been attracting customers with projected savings on monthly energy bills, solar system maintenance agreements, and guaranteeing high system performance. As more and more individuals and companies realize the financial and environmental advantages of solar leasing programs, expect to see more options available to consumers countrywide.

 http://www.ctsolarlease.com/documents/NRELSolarLeasePaperMarch2009.pdf 

 http://www.nrel.gov/docs/fy09osti/44853.pdf

This program summary and other State Solar Spotlight Program case studies can be found on this website under State Activities.

State Solar Spotlight: August 2011

Group Buying – the New Thing in Residential Solar

Last year, Clean Energy States Alliance (CESA) gave Energy Trust of Oregon (ETO) a 2010 State Leadership in Clean Energy (or SLICE) Award for its Solarize Portland program. SLICE awards are made to CESA member programs or projects that are especially innovative and effective at incentivizing, promoting, or deploying clean energy technologies, and the distinguished panel of judges determined that Solarize Portland deserved to be recognized for its innovative model of incentivizing residential solar.

Photo Copyright Energy Trust of Oregon, 2010

In their comments, the judges noted, “Portland might not have the most sunlight, but it’s been able to move ahead with a major solar initiative in Solarize Portland. This grassroots effort, facilitated with a partnership between the statewide nonprofit and local neighborhoods, moved ahead in a really short time, using a relatively modest subsidy to command a good price for residents. The model is potentially replicable by communities across the U.S., and is particularly important to study in light of declining state incentives and challenges to the PACE residential financing program.”

Since then, several other “Solarize”-type programs have popped up all over the U.S. (and beyond), in cities, states, and utility territories, and, based on their apparent success, these programs may be just the ticket to keep up the solar energy momentum in these times of diminishing state and federal incentives.

So what is so great about the Solarize model? For one thing, its marketing and promotion are usually community-led. For Solarize Portland, Energy Trust of Oregon (ETO) and the City of Portland took advantage of the existence of a strong network of neighborhood associations in Portland. ETO and the City worked with Southeast Uplift Neighborhood Coalition to directly engage citizens through grassroots outreach and education about solar options and costs, as well as providing free site assessments. The enrollment process was designed to be simple, and each step was facilitated by the project partners.

Next, it lowers the technology cost, through the use of group buying power (think Groupon and Living Social). The project partners in Portland facilitated a competitive RFP process for a contractor based on set pricing tiers – i.e., once certain participation thresholds were met, progressively lower system costs were triggered. ETO also provided its standard solar incentives to the mix: at that time, $2.25/watt; and residents were also eligible for federal and state tax credits.

Finally, it is of limited duration. While the grassroots education and group buying method were designed to address the previously slow pace of solar installations in Portland (38 were installed in all of 2008), the limited enrollment period addressed another problem, identified in a 2007 market study: most Oregonians thought about installing solar for over two years before finally taking action. A good deal with a deadline seems to consistently motivate more takers than a good deal with no end in sight.

In just six months from its inception, Solarize Portland resulted in the installation of solar systems on 120 homes (more than three times the 2008 number). The 120 installations added 347 kW of new solar photovoltaic capacity, estimated to produce over344,500 kWh of electricity per year. And, buzz generated by the program had a spillover effect: it generated downward pressure on area PV system costs and contributed to a 320% increase in area non-Solarize installations during the project timeline.

The project’s success has led to subsequent Solarize efforts in four additional Portland neighborhoods, one in the rural city of Pendleton, Oregon, and another for employees of Columbia Sportswear Company. And the model is catching on country-wide.

As a direct result of Solarize Portland’s success (and, we’d like to think, of CESA members sharing their best practices and success stories at our biannual meetings), Massachusetts Clean Energy Center (MassCEC) – also a CESA member – launched Solarize Massachusetts this April, in collaboration with the Green Communities Division of the Massachusetts Department of Energy Resources (DOER). Solarize Massachusetts will target four towns across the state (selected by lottery): Harvard, Hatfield, Scituate, and Winchester, and will be targeted to both residents and businesses. The pilot program RFP sought bulk purchasing proposals from solar integrators, with tiered costs based on participation; MassCEC and DOER will work with the selected integrator(s) to provide education, site assessments, financing models, and installation services.

Other programs in the U.S. are demonstrating the program’s success at the municipal level. In the fall of 2010, Open Neighborhoods, an organization that connects neighborhoods with clean energy opportunities through social networking tools, launched the GoSolar campaign in the Los Angeles area to offer free solar assessments and group pricing to homes and businesses. Their 2010 campaign resulted in 200 solar installations at prices under $5.00/watt – on par with utility-scale solar installed costs – and they are proceeding with subsequent campaigns based on that success.

And in mid-July, the San Francisco Department of the Environment and the World Resources Institute launched the San Francisco pilot of Solar@Work, a program that helps companies implement solar projects by offering an up-front purchase, a solar lease, or loans, all offering group purchase system discounts of 10 to 15 percent.

Meanwhile, One Block Off the Grid (1BOG), in many respects the pioneer of solar group discounts, continues to aggregate group buying initiatives across the U.S. based on demand generated through their website; individuals (and I assume businesses) can enter their zip code and find out if there’s a solar group opportunity near them. (Also see Sunny Britain, which last week announced a similar program in the UK).

1BOG has found its niche, but the state- and city-supported initiatives of the Solarize type show great potential to motivate solar installations because of specific attributes, especially the way they partner with trusted institutions such as state energy offices, public works departments, and neighborhood associations. Pairing the national expertise of group buying facilitators and solar leasing companies with the local, city, or state brand, insight, and oversight is proving to drive demand for solar, which is in turn driving down system costs, demanding increases in manufacturer and installer accountability, and sparking healthy competition in the PV industry across the U.S.

So, what’s next? Which state will next take up the Solarize torch? When will it catch on with utilities? Who of the Fortune 500 will catch the wave of company-sponsored Solarize programs for employees? What other groups/clubs/organizations could act as facilitators for these efforts? Is it too far-fetched to think my local cooperative-owned grocery store will be rolling out group discounts for its customers? Apparently not.

Innovative programs such as Solarize that leverage available funds are proving to drive down solar costs in a major way, while keeping solar installers and manufacturers employed as the states and the industry watch the federal government cut back on solar deployment in favor of next-generation R&D and manufacturing initiatives. Let’s hope the former can keep up the momentum and bridge the gap until the latter is ready for prime time.

A PDF file of this program summary and other State Solar Spotlight Program case studies can be found on this website under State Activities.