Let There Be Light — Power On Consulting

Community Solar—have you heard about it?

If you haven’t, you’re likely living in an area where there’s no related governmental program. Or, maybe you’ve been living under a rock.

No insult intended! I myself just recently learned about community solar—and I’m even in the energy business—so I’m a rock dweller in that regard.

According to www.energy.gov, as of December 2021, twenty-two states and Washington, D.C. have policies supporting community solar deployment.

My guess is that if you’re in one of those 22 states or in DC, you’ve recently been peppered with mailers from companies offering discounts on electricity through community solar. I’ve seen offers of 10% to 21% savings on electricity rates compared to published electric service provider rates.

Is it a fad? Maybe an energy industry fidget spinner? Only time will tell.

Community solar isn’t new—but it is also not fully rolled-out, as states continue working out the bugs through pilot programs. The use of community solar could become more widespread in the coming years—but then again, it might not. Who knows?

Remember the fidget spinner? Back in 2017, fidget spinners sold for $10 and more. Today, $10 will buy you ten or more of those annoying toys. In contrast, what are the chances of electricity prices dropping by a factor of 10 anytime soon? I’m sorry to say, the chances of are slim, my friends.

Electricity prices fluctuate, impacted by many variables—like weather, and energy supply abundance, or disruptions. Long-term forecasts generally point to higher prices over time. If you simply wait for prices to drop, fidget spinner style, you’ll be waiting a long time, I’m afraid, and you’ll have little to show for your patience.

However, options exist to reduce your electricity cost now!

One option is solar energy.

Investing in a roof-top or ground-mounted solar system is a great idea. Solar systems can work for residential or commercial applications.

You can possibly generate all the electricity you need—maybe even more, and sell the excess to the utility company.

Solar systems require roof space, and/or adequate unshaded land, and money to pay for it.

Cash or credit accpepted here

**Financing is typically available for those who qualify for solar power investments, and there may be tax credits as well. More on that in my next blog.**

Now, because of these requirements, solar systems are not for everyone.

Some simply can’t afford the cost. Others may live under a canopy of tall shade trees—or their roof may be facing the wrong way, eliminating the ability for solar panel placement in an optimal direction.

If there are compelling reasons why owning your own solar power system doesn’t make sense, it doesn’t necessarily mean you have to stay in the dark!

Community solar provides an opportunity to get some of the benefits of solar energy, without investing in your own system. Either the community solar project reaches out to you, and solicits your business, or you seek them out. Then, you can op-in to buy electricity from a community solar project. It’s that simple.

You would get a portion of the solar farm’s total output allocated to you. It could be a set amount, or an allocation that matches your electricity usage. It depends on the community solar project you subscribe to.

Suppose a solar farm called Big-Sun Solar is built on 5 acres of land and can produce 1 MW (megawatt), or 1 million watts. Let’s assume that the capacity factor of solar is 25%. This means that solar panels will generate 25% of their potential output, assuming the sun shone perfectly brightly 24 hours a day. 1 MW of solar panels will generate 2,190 megawatt hours (MWh) of solar energy per year.

Now let’s assume your household electricity usage averages 40 kilowatt hours (kWh) per day, or 14,600 kWh per year. That’s 14.6 MWh.

Big-Sun could fully supply 150 homes using the exact same amount as your assumed usage. 150 x 14.6 = 2,190

If you decide to sign up with Big-Sun, but all 2,190 MWh are already accounted for by 150 other subscribers, then you’ll have to seek another solar project. If there are no other choices, then you’ll have to wait for one of the 150 to opt-out.

The projects I’ve reviewed offer flexible opt-in and opt-out policies, and without cancellation fees. That’s a good thing.

Keep in mind that your connection to the electricity service provider won’t change, and the electricity flowing through your meter may, or may not, come from the solar panels in the community solar project.

If you are a next-door neighbor to the solar farm, then you may get a portion, or all of your energy from the farm. But if there’s a different power plant closer to your location, such as a coal-fired facility, you’ll most likely receive some of the energy they supply to the grid.

Unless you generate your own power, through your own solar panels or some other alternative generating system, electric energy will be a blend from the nearest generators.

For a given electrical load, every watt of electricity generated from solar, offsets the need for that same watt to be generated from other sources, such as coal, nuclear, or natural gas-fired. Even though you may not get those green/renewable electrons flowing into your house or business, they’re going into the grid, and helping achieve the reduction of fossil fuel emissions.

Solar offsets other sources

**Every watt of electricity generated from solar, offsets the need for that same watt to be generated from other generators, such as coal, nuclear, or natural gas-fired.**

You would get credited for your subscribed portion of the total output from the community solar farm, and that company would provide solar credits to your electricity service provider account. Your bill from the service provider would then be reduced by the portion of energy provided by the community solar project.

Here’s a simplified example of billing:

Let’s say you sign up for community solar power, at a 10% discount from the utility’s rate.

In one month, your total utility bill for energy used is $300. The community solar company provides a $250 credit to the utility company for energy allocated to your account through your community solar subscription. So, you pay the utility $50 instead of $300.

You also get a bill from the community solar company for the solar credits. That $250 credit would be reduced by the discount rate of %10, or $250-$25=$225.

Without community solar your bill would have been $300. With community solar the total bills are $50+$225=$275.

Your savings will depend on how much electricity you use, the discount rate, and the amount of solar energy allocated to your account. For that month you would have saved $25.

If you’ve been stifling that java chip frappuccino craving because of budget concerns, the community solar idea may be your solution to affording three or four of those festive drinks each month.

Seriously, folks, any savings is good in my books, and community solar can provide savings without much effort or risk. It also helps support sustainability and green energy initiatives, so if that’s on your to-do list, you can check that box too.

That’s a nutshell look at community solar.

In my next blog I’ll offer some insight into owning your own solar power system. In the meantime, remember: