Community Solar Gardens

Description of the model

Community solar gardens are solar projects that are collectively owned by a group of individuals who get credited in their electricity bill for the amount of electricity generated by their share of the system. Community solar gardens require a piece of legislation called community net metering (also often referred to as virtual net metering) in order to raise funds from individual ratepayers and to credit their utility bills periodically. Widely applied across North America and Europe, net metering allows individuals and businesses to sell excess energy generated by their on-site renewable energy (RE) projects back to the grid and receive credits on their utility bill. Community net metering goes a step beyond net metering by enabling homeowners and renters who do not have access to suitable roofs and/or the financial means to install their own renewable energy systems to invest in off-site, collectively-owned RE projects. According to non-profit group Vote Solar, more than 75 percent of homes and businesses in the United States (U.S.) cannot benefit from net metering because their roof isn’t suitable or they rent their home or office, among other financial and non-financial barriers. In this sense, community net metering helps individuals overcome many of these barriers through allowing multiple individuals to share the costs of a renewable energy project and reap the benefits directly via cost savings in their utility bills.

Community solar gardens are enjoying an ever-increasing popularity across the United States. For policy-related reasons that will be explained in detail below, these projects do not currently exist in Canada.

The legal structure of a community solar garden is decided upon by the project’s host organizer, which manages the project, enrolls members, and acts as a liaison with the utility company that is purchasing the generated power. The three main community solar ownership models in the U.S. are:

  1. Utility-sponsored model: In this ownership model, the local utility (which could be a co-operative) owns or operates the community solar garden that is open to voluntary ratepayer participation. In return, customers receive a payment or credit on their electric bills that are proportional to their contribution and to the amount of overall electricity produced by the solar project.
  1. Special Purpose Entity Model: In this scenario, community solar gardens are owned by special purpose entities formed by existing business enterprises that are seeking to take advantage of tax incentives. These special purpose entities sign a power purchasing agreement with the local utility and recruit utility customers to invest in the project.
  1. Not-for-profit Model: A charitable or not-for-profit organization administers a community shared solar garden on behalf of donors or members. As a result, the not-for-profit organization enjoys lowered electricity cots and an increased financial ability to pursue its mission.

Enabling policies and application of the model across Canada

In order to effectively support the development of community solar gardens, jurisdictions (state/province or municipal) can introduce community net metering (or virtual net metering) legislation that allows individuals to invest in solar projects and receive credits on their utility bills accordingly, Currently, the only jurisdiction with community solar activity is the United States, with over 50 community solar gardens currently operating in 17 states. Jurisdictions that already adopted community net metering legislations include California, Colorado, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, Vermont, Washington state and Washington, D.C., while campaigns are ongoing in other parts of the country. For more detailed information regarding each of these legislations, you can visit the SharedRenewables.org website.

Listed below are some project examples from the U.S.:

Community Solar Garden Jurisdiction Model
Poudre Valley REA Poudre Valley, Colorado, United States (U.S.) Utility Sponsored Model
Orcas Island Education Foundation San Juan Island, Washington, U.S. Not-for-Profit Model
Green Mountain Power Rutland, Vermont, U.S. Utility-Sponsored Model
My Generation Entity Marion, Massachusetts, U.S. Special Purpose Entity Model

Numerous jurisdictions in Canada have adopted net metering legislations that allow for individual on-site projects to sell excess electricity to the grid, such as British Columbia, Ontario, New Brunswick and Saskatchewan. However, to date, community net metering laws have not been introduced by any provincial or municipal jurisdiction in Canada. As a result, despite its strong potential in expanding access to renewable energy investments for people facing financial and geographical barriers, the community solar garden model has not yet been applied in Canada.

For more community solar project examples, you can visit The Community Power Report.

Summary

  • Community solar gardens are solar projects that are collectively owned by a group of individuals who get credited in their electricity bill for the amount of electricity generated by their share of the system.
  • They are enabled by a piece of legislation called community net metering, which increases access to renewable energy ownership by enabling homeowners and renters who do not have access to suitable roofs and or the financial means to install their own renewable energy systems;
  • The United States is a pioneer in this field, with over 50 projects currently operating in 17 states;
  • Despite its great potential, community net metering laws have not yet been adopted by any jurisdiction in Canada.

 

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