Innovative Opt-Out Community Solar Business Model Is Approved in New York

In late February 2021, the towns of Lima and Brockport in upstate New York entered an agreement to provide 3,800 residents with a first-of-its-kind business model for community solar. The model will deliver 10% solar credit savings to customers without requiring individual contracts, credit checks, or physical solar panels.

Vote Solar’s Access & Equity Advisory Committee (AEAC) found that one of the biggest barriers to community solar programs in low and middle income communities is an often bureaucratic, lengthy, and sometimes humiliating income verification process. (The AEAC is composed of energy leaders from Vote Solar and a rotating list of partner organizations, including GRID Alternatives, the NAACP, and Nexamp.) Streamlining this process is beneficial for the community and developers as developers are nearly guaranteed selling generated electricity without needing to solicit individual customers. In addition, the municipal-level size of these developments allows for developers to take advantage of economies of scale. Furthermore, community solar development construction, operation, and management are located near the communities they intend to serve, creating long-lasting jobs and a consistent revenue stream for governments, consequently building local wealth.

New York State Leads in Community Solar Development Goals, Programs, and Incentives 

Distributed solar projects can be a challenge for local governments due to long development timelines and lack of consistency in future revenue. However, New York State’s Public Service Commission recently set rules for large customers to serve as anchor subscribers for distributed solar projects, which will guarantee financing to developers and drive the community solar market. New York Power Authority (NYPA) Community Solar and Storage Program staff have agreed to assist anchor subscribers in all stages of the development process. 

NYPA aims for a community solar target of 75 MW of renewable capacity, including 15 MW of paired battery storage by 2025. New York's community solar market is positioned as the strongest community solar market in the US, with more than 1,050 community solar projects built or being developed under Governor Cuomo’s NY-Sun Program. According to New York State’s website, “New York's Community Solar initiative has more than 533 MW installed and 2,100 MW in the pipeline.”

Community Solar Activity Grows across the US

According to Guidehouse Insights, while the community solar market is concentrated in just a few states led by Minnesota, Massachusetts, Florida, and New York, there is also activity in over 39 states. In February 2021, ENGIE North America and Solstice completed an 11.2 MW portfolio of community solar projects in Illinois. ForeFront Power and TurningPoint Energy recently completed four Maryland-based community solar projects representing approximately 10 MW. As part of New Jersey’s 3-year community solar pilot program, AC Power submitted a portfolio of 31 MW, expected to begin construction in spring 2021. 

As of February 2021, 19 states and Washington, DC have adopted legislation enabling community solar. According to the Solar Energy Industries Association, nearly 2.6 GW of community solar have been installed across the US through 2020. Since the Biden administration plans to expand solar deployment as part of a sweeping climate plan, community solar may experience robust growth in the US over the coming years.