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National News

Can’t install your own solar panels? Some areas let you join a community project.

Credit: iStock

by Alex Brown, Wisconsin Examiner
May 6, 2024

For four generations, Steve Wine’s family has tended a 600-acre farm in Virginia’s Shenandoah Valley, raising steers and growing corn, soybeans and alfalfa. The farm has struggled in recent years with rising costs and slumping crop markets, leaving Wine to question the operation’s viability.

In a bid to sustain the farm, Wine will begin in the coming months to harvest a new crop: solar energy. He’s leased 34 acres to a solar electricity developer, which has installed panels that will generate about 5 megawatts of power at peak capacity. The project is funded by subscriptions from about 1,000 households in the region, who will receive credits on their electricity bills based on the power it generates.

“This is a fixed income that we know is going to be there,” Wine said. “I love farming, and this was an option we had to help lighten the burden.”

The energy model, known as community solar, is growing across the country. It allows people who rent homes or who can’t install rooftop panels on their own properties to subscribe to mid-size solar projects on nearby farms, schools or big-box stores.

While subscription methods can vary, industry groups say a typical monthly subscription of $120 to $135 can end up saving participants $15 to $30 a month. For many, the savings can amount to 5% to 20% of their electricity bill.

For property owners who host the solar panels, leases can be worth about $30,000 a year, according to one developer.

Backers say community solar can play an important role in expanding clean energy, and give low-income households relief on their energy costs. Although definitions can vary, the industry trade group Coalition for Community Solar Access says 20 states have policies that enable “true” community solar, which requires utilities to credit the electricity bills of households that subscribe to solar projects that aren’t built or run by the utilities themselves.

This year, lawmakers in at least 10 states have put forward bills that would enable or expand community solar programs, driven in part by federal funding opportunities from the Inflation Reduction Act. Citing consumer choice and affordability, a growing number of Republican lawmakers have sponsored such proposals, including in seven of those states.

But some bills have stalled amid strong opposition from utilities, which have argued that community solar programs don’t account for costs such as billing overhead and distribution fees, which are passed on to non-subscribing ratepayers.

“All the other utility customers can’t subsidize the benefits of those who are subscribing to community solar projects,” said Zach Hill, lead public and community affairs manager at Alliant Energy, a Midwestern utility that has opposed legislation in Wisconsin. “There’s no consumer protections [in the bill].”

‘It’s working’

Earlier this year, Virginia lawmakers passed bills to expand the state’s community solar program by 200 megawatts, enough to power more than 30,000 homes, and to bring projects into new areas of the state.

The state’s initial program, created in 2022, was capped at 150 megawatts and was nearing that capacity. According to a November projection by the consulting group Dunsky Energy + Climate Advisors, more than 12,000 households will be subscribed to the program this year, receiving bill credits totaling $19 million — an average of about $130 per household per month.

Like many community solar programs, the Virginia measure exempts or discounts subscription costs for low-income customers, while reserving a set amount of memberships for such households. Low-income households have made up the entirety of the program so far.

“The fact that we were bumping up against the cap shows that there’s a demand for it and it’s working,” said Del. Rip Sullivan, a Democrat who sponsored the expansion measures this session. “These projects help owners of farmland keep their farms, lower costs to ratepayers and enable everyone around the state to participate in our transition to clean power.”

Republican Gov. Glenn Youngkin signed Sullivan’s bills into law last month.

As Virginia’s program expands, other states are looking to establish their own. The Pennsylvania House advanced a bill earlier this year that would create a community solar program in the state. Sponsored by a mix of Democrats and Republicans, the measure was recently referred to a Senate committee.

Some utilities in Pennsylvania have worked with lawmakers to shape the proposal. Brian Ahrens, senior communications specialist with PECO, the state’s largest electric and natural gas utility, said the company is generally supportive of the measure but concerned about an amendment that would prevent utilities from recovering costs such as distribution expenses related to community solar. PECO aims to stay engaged in discussions as the bill heads to the Senate, he said.

“This is something we’d like to see, and it’s a benefit to our customers,” Ahrens said. “We want to ensure that [projects] are paying their fair share of the costs needed to tap into our distribution system.”

Many of the state proposals this session have been sponsored by Republican lawmakers, including those in Georgia, Iowa, Michigan, Missouri, Ohio, West Virginia and Wisconsin.

“The trend in the last few years has been more and more red states taking up these bills,” said Brandon Smithwood, vice president of policy at Dimension Renewable Energy, an Atlanta-based developer that has built community solar projects in 11 states. “There’s an appetite for these smaller, locally controlled projects that can yield savings to customers.”

Utility battles

In Michigan, Republican state Sen. Ed McBroom has been among the leaders backing community solar legislation.

“I’m doing my best to try to bring value to consumers who are paying rates that are far too high,” he said. “This allows folks to tap the solar market on a small scale.”

McBroom said the proposal has run into opposition from utilities whose leaders say the costs of integrating community solar will drive up rates. He questioned the sincerity of their concerns over consumer impacts. Democratic leaders in the Senate have committed to holding hearings on the issue, he said.

Consumers Energy, a Michigan-based utility, did not grant an interview request.

Community solar backers say utilities are a common roadblock for such proposals.

“[Utilities] would rather have their monopoly on the grid, and they have their claws in the entire political ecosystem,” said Matt Hargarten, public affairs director with the Coalition for Community Solar.

Utilities in Wisconsin successfully opposed a community solar proposal drafted by Senate Republicans. In an interview, officials at Alliant Energy said the Wisconsin measure failed to include protections that would ensure projects lined up sufficient subscribers before being built. Utility leaders feared the proposal would force them to buy electricity from projects that don’t have enough subscribers to be viable.

Alliant also pointed to its own subscription-based solar programs, offered to customers in Wisconsin and Iowa.

But advocates say such utility-run programs aren’t truly community solar, as they fail to reach the scale and cost savings of those offered by third-party developers.

“What’s important is creating a competitive market that allows for non-utility project developers,” said Maria McCoy, a researcher with the Institute for Local Self-Reliance, a nonprofit that seeks to empower local communities. “Subscribers should save money and not be paying a premium.”

In Washington, Democratic state Rep. David Hackney this year introduced a community solar bill that quickly ran into opposition. He conceded that utilities in the state raised legitimate consumer protection concerns that would need to be resolved before the issue could advance next session.

“The idea of community solar is still alive,” he said. “The hard work of legislation is coming to an agreement that’s acceptable to both sides.”

Among the utilities’ concerns was the possibility of incompetent or fraudulent developers exploiting their subscribers, with the utilities left to face the customers’ wrath.

“It was going to be us that they would come to, because we’re the ones putting those charges and credits on their bill,” said Heather Mulligan, manager of customer energy renewable programs with the utility Puget Sound Energy. “We’re very open to continuing the conversation and finding ways to support the development of community solar in a way that ensures there is oversight of all parties participating.”

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This story is republished from Wisconsin Examiner under a Creative Commons license. Read the original story.