How a community solar scheme is turning sunshine into dollars

Rocky Mountain Institute

Years ago, a Basalt native Paul Spencer set out to build an off-grid home not far from RMI’s Snowmass office. Through the process of designing and building his house, he developed a passion for real estate, and became well versed in renewable energy technologies. He began looking into the option of a green development in the Roaring Fork Valley: super-efficient homes powered by renewable energy.

But, due to trees shading the proposed building sites, rooftop solar didn’t work. Instead, Spencer proposed to build a shared solar array that would power the neighborhood. While the development didn’t go through, the community solar concept remained.

Now, Spencer is the president and founder of Carbondale-based Clean Energy Collective (CEC) an LLC that builds, operates, and maintains community-based clean energy facilities, currently all solar PV. Last week, David Wiedinmyer, director of business development, led a group of RMI staff on a tour.

“There are real and significant obstacles that the solar industry faces,” said Wiedinmyer. “If there weren’t you’d see a lot more solar on rooftops throughout the country.”

Currently in the Roaring Fork Valley—well known for its wealth and “green progressiveness”—only 0.7 percent of area properties have net-metered solar systems on them (both residential and commercial).

The perfect storm for solar adoption, which includes factors like sun, available capital, high power costs (i.e. the higher your power costs, the more solar makes economic sense), convenience, and a progressive community and utility is indeed hard to create on a home-by-home basis. But, in order to get to an 80 percent distributed renewable energy future – as outlined in Reinventing Fire – the country will need power from over 700 gigawatts of solar (that’s 140 times more solar than we have today), far more than what we can put on the rooftops of perfectly situated homes and office buildings.

“If we want more than 0.7 percent adoption in the Roaring Fork Valley, and greater adoption nation-wide, we need to talk dollars and cents, and how to hedge against electricity price volatility—and trust that the environmental motivations are there,” Wiedinmyer said. “The customers that are going solar for the environment have likely already done it. Solar is a smart investment whether you care about clean energy or not.”

By pulling together entities that wouldn’t normally work together, CEC has created a business model that provides an affordable—and hassle-free—clean energy option for customers that might not otherwise consider solar.

Here’s how it works: CEC is a private entity that puts up the capital to build the solar array. Customers purchase solar panels through CEC at a price of $725 per panel ($3.15/watt per 230-watt panel). Holy Cross Energy, a member-cooperative utility with territory from Aspen to Rifle, purchases the energy created by the solar panels and credits it to the customers on their bill.

Holy Cross benefits from the clean electrons added to their grid, bringing them one step closer to their goal of 20 percent renewables by 2015. In addition, CEC’s proprietary program—Remote Meter—manages the array and customer interface, making it painless for the utility to assign credits to the right customers for the right amount.

Customer benefits include:

– Alleviating risk: Purchasing a panel through CEC is a one-time up-front cost. When you move, if you stay in Holy Cross’ territory, you can transfer your credit with the click of a mouse. If you move out of their territory, you can sell your panel back to CEC, sell it to another customer, or donate it to an area business or non-profit.

– Cheaper prices: CEC is buying more panels, so through economies of scale they can offer better prices than if customers bought a panel just for their rooftop.

Better output and efficiency: The panels are cleaned and serviced on a regular basis so they consistently perform at optimal efficiency. This maintenance (along w/ insurance) is paid by a perpetually funded savings account (the price is included in the up-front cost of the module). This also provides certainty to customers who want to know that they won’t have to pay for more down the road.

Wiedinmyer acknowledged that, while this sounds almost too good to be true, there were significant reasons why this business model wasn’t implemented by anyone before.

“CEC spent the first two years figuring out how this structure would work from a logistical and legal standpoint,” he said. “We had to become familiar in utility law, real estate law, federal tax code, negotiate with the utility, write software, find investors, find a perfect site, all before we could even break ground.”

But, their hard work paid off. They broke ground on their Carbondale installation in June 2010, quickly selling out to 19 customers. Now, CEC is working on five projects, collaborating with a variety of electric utilities throughout Colorado and a proposed site in New Mexico. Their current installations include 340 panels, where customers own anywhere from 1 to 87 panels (yes, in Aspen there are homes big enough for 87 panels to offset their energy use).

“PV panels continue to get cheaper, but whether solar incentives will exist on a state or nation level in the future remains a big question-mark,” Wiedinmyer said. “This gives us a sense of urgency in developing new projects.”

This article was originally published on the Rocky Mountain Institute blog – blog.rmi.org/. Reproduced with permission.