New Jersey Community Solar Program Targets Low and Moderate Income Housing

Community solar programs are designed to allow utility customers that may not be able to install solar PV to gain access to the benefits of solar power to lower electric bills. These target customers either lease their residences, live at properties that have shaded rooftops, have roofing systems that are in poor condition, or cannot afford to put solar PV on their property. These barriers are particularly pronounced for low and moderate income households.

The state of New Jersey recently approved a community solar pilot program designed to make lower cost energy available to local low and moderate-income households. The pilot has an annual limit of 75 MW in the first year, and 75 MW in the second and third year, totaling 225 MW over 3 years. At least 40% of the program is targeted for low and moderate income families. The New Jersey program also allows participation by schools, local governments, and nonprofits.

Drivers for Community Solar

According to Vote Solar, 19 states plus the District of Columbia now have statewide programs totaling 42 voluntary, utility-led programs. Despite a lack of consensus on customer participation models, the drivers for community solar include the following:

• Rise of technology platforms: Turnkey solar PV production customer subscription bill crediting software platforms that enable the deployment of community solar have emerged.

• Regulatory drivers: The deployment of community solar programs has grown due to the willingness of local regulators to require utilities to offer such programs. 

• Customer interest: Many customers are interested in the benefits of solar PV, but are limited in their ability to install solar PV on their property.

Barriers to the Deployment of Community Solar

• Regulatory constraints: Challenges surrounding the integration of utility-led solar PV community solar programs into wholesale capacity, transmission and distribution, and retail electricity markets add complexity and cost to programs.

• Low natural gas prices: Low natural gas prices tend to depress the cost of wholesale electricity, making it a challenge for community solar subscribers to save money on smaller scale projects.    

• Billing complexity: Utility bills are difficult to understand, and community solar subscribers’ bills are even more complicated, often with month-after billing credits for solar PV production. Such complexity can make actual savings assessment challenging for customers.

Guidehouse Insights highlights the market factors for residential community solar and commercial and industrial community solar in two reports featured in the Utility Customer Solutions research service. Guidehouse Insights will be closely tracking the development and implementation of community solar program to gauge how programs scale from the utility standpoint, and simplicity of costs savings from the customer standpoint, can drive further growth of these programs.