Community Solar PV Comes to the UK

Community solar is generally defined as an offsite, utility-scale solar PV installation that provides renewable energy (or the equivalent financial benefit) to residential or C&I customers on a subscription basis. Although not a requirement, community solar PV has been enabled in many US states by the rollout of a virtual net metering or on-bill credit by the local utility.

What Is Community Solar?

The Smart Electric Power Alliance (SEPA) defines a community solar program, also known as shared solar, as a voluntary business model where subscribers pay for a share of a specified offsite solar project and receive credit on their electricity bill for their portion of power produced. In the US, the regulatory status and nature of the renewable portfolio standard in the program state determines whether a fungible tracking instrument that conveys ownership of the environmental attributes from the project can be given to subscribers to demonstrate of ownership of the renewable electricity and carbon reductions. According to SEPA, as of April 2018, 228 utilities in 36 US states had an active community solar program. Further, SEPA has determined the total installed capacity of community solar programs in the US now totals 734 MW, with approximately 387 MW installed in 2017.

Europe Hasn’t Been Big on Community Solar

In Europe, despite 20 plus years of liberalized electricity markets, there has been limited deployment of community solar PV to date, mostly due to lack of a consistent regulatory framework to foster projects. Now the 2030 EU Renewable Energy Directive is poised to recognize community energy to ensure the development of enabling frameworks at the national level. On top of the EU Directive development, a community energy program in London is breaking further ground ahead of the expiration of a local feed-in tariff in early 2019 to support community solar. London’s mayor Sadiq Khan recently announced a second round of subsidies for community energy projects to support the first round in auctioned subscriptions earlier this year with grants of up to £15,000 ($19,371) per project to support project development activities for new community renewables projects.

Community solar PV offers three key advantages to customers, utilities, and energy suppliers:

• Establishing a community solar program allows customers that cannot install onsite solar PV on their own properties (due to roof age, condition, shading) the opportunity to obtain the potential long-term cost reduction benefits of procuring renewable energy.
• Low and moderate income customers who many not be able to afford onsite solar PV can also obtain the potential long-term cost reduction benefits of procuring renewable energy.
• Energy suppliers can use community solar subscription programs to connect with their customers to offer green pricing programs along with the long-term cost reduction benefits that may be available.

Community Solar Gaining Corporate Popularity

The emergence of community solar PV as part of corporate renewable energy procurement is examined in my recent market forecast report, Corporate Utility-Scale Offsite Renewable Energy Procurement Solutions. Further, the marker for residential community solar PV will be examined in the upcoming Guidehouse Insights report, Residential Energy and Non-Energy Solutions.

It’s clear that there has been limited penetration of community solar PV programs to date in the US and the European Union. But the progress made to date on the capacity development and regulatory front for community solar will position this type of customer-focused energy procurement solution as a more mainstream procurement option over time.