Community solar

A community solar farm or solar garden is a solar power installation that accepts capital from and provides credit for the output and tax benefits to individual and other investors. The power output of the farm is credited to the investors in proportion to their investment, with adjustments to reflect ongoing changes in capacity, technology, costs, and electricity rates. Companies, governments or non-profits operate the farms. The farms encompass both photovoltaic and concentrating solar power technologies.

Problems with solar power

Home-owners and others can already benefit from solar power generation (and the accompanying tax benefits) by installing systems on their properties. This approach has several issues that limit its acceptance:

• Trees, roof size and/or configuration, adjacent buildings, the immediate microclimate and/or other factors may reduce power output to unacceptable levels.
• Building codes, zoning restrictions, homeowner association rules and aesthetic concerns slow acceptance.
• Many utilities are loath to accept solar power unless it is accompanied by corresponding power storage facilities to handle periods without the sun.
• Homeowners lack the skills and commitment to install and maintain solar systems.
• Installation costs for retrofitting solar technology to existing structures is more costly than in green-field applications.
• Only property owners are eligible for the credits.

Legislation

United States

Changes to federal and other tax laws are necessary to enable community solar farms. U.S. Senator Mark Udall is proposing the SUN Act (Solar Uniting Neighborhoods) to extend the existing 30% tax credit to community solar farms. Senate Bill 3137 has been referred to the Finance committee.

Groups of individuals or homeowner associations would be able to locate utility-scale solar power facilities on a piece of common ground in collaboration with local utilities that would distribute the power and credit owners based on their percentage of investment in the solar farm, extending the tax credits accordingly.

“These projects have the potential to drastically increase the adoption of clean energy nationwide, but the tax code hasn’t kept up,” Udall said. “You can get a 30-percent tax credit for putting a solar panel on your house, but not for investing in a solar farm.”

California

California already has enabling legislation. SolarShares offers up to 1,000 customers of the Sacramento Municipal Utility District (SMUD) , the opportunity to buy "shares" in a 1 MW solar farm. The electricity generated by each customer’s “shares” appears as a credit on his or her energy bill, a savings expected to average between $4-$50 a month, given sunshine variability. For a monthly fee—starting at $10.75 a month (averaging 9%) for a 0.5 kW system—participants opt into solar power production. The current phase is sold out, although plans are in progress to expand capacity.

Colorado

In the Colorado state House, Rep. Claire Levy, D-Boulder, has introduced a bill that would require the Public Utilities Commission to rewrite rules to direct investor-owned utilities to offer rebates for community solar gardens.

Colorado solar installers express misgivings about Levy's plan. As originally structured, the provision would classify solar gardens as a “community-based project.” Under Colorado law, such projects apply 1.5 multiplier to the output—that is, each kilowatt (kW) of “community-based” solar energy counts as 1.5 kW when tallying a utility’s renewable energy obligation. Other states, such as New Jersey and Massachusetts, use multipliers to incent the purchase of equipment that’s manufactured in that state. Some members of the Colorado Solar Energy Industries Association (CoSEIA) worry that the plan would favor large-scale projects, which are typically built by out-of-state installation companies, and result in up to 30 fewer installed mW over ten years.

Massachusetts

State Representative Matt Patrick authored the Green Communities Act of 2008, authorizing what is formally known as “neighborhood net-metering”, which allows a group of residents in a neighborhood/town to pool resources to cover the capital cost of a renewable energy installation.

Residents of Falmouth built a cooperatively run solar garden. Each member receives benefits from the co-op; including tax credits, S-RECs, and the production purchased by NSTAR.for its residents.

Massachusetts and the Federal government each offer incentives to improve solar economics. A traditional investment in photovoltaics without incentives would take 12 or more years to pay back the initial cost. The incentives lower the payback period to 6-10 years.

Utah

The electric utilities in St. George built a large photovoltaic facility to exploit 310 days a year with sunlight, and allow residents to purchase it to supplement conventional energy. The program itself has no set-up and no maintenance for the purchaser.

Participation is sold in whole and half units of 1 kilowatt (“kW”). A 1 kW “unit” on the SunSmart grid costs of $6,000. One unit will generate power equal to approximately 15% of the average home’s monthly power (or about 140 kWh per month). A one-time tax credit of 25% of the purchase price, up to a maximum of $2,000, is available from the state of Utah. Purchasers receive a monthly energy credit for the energy produced that month by the “unit” of panels.