Clean Energy Collective Introduces Rate-Based Community Solar for Investor-Owned Utilities
Continuing to lead innovation, Clean Energy Collective (CEC), the pioneer and national leader of roofless community solar, announced today the launch of the first shared solar program that provides investor-owned utilities (IOU) with the ability to rate base a community solar program while offering their solar customers an immediate economic benefit, without non-participant subsidization.
CEC’s new IOU-owned solar model bucks conventional wisdom that utilities cannot justify ratepayer solar participation without creating a subsidy. “After several years of pursuing this goal, CEC is finally able to offer community solar to our IOU partners as a profitable investment as well as a preferred offering for their customers,” explains Paul Spencer, founder and CEO of Clean Energy Collective.
The inflection point is driven by the current intersection of low solar installation costs, high customer demand for community solar options, rising energy rates, and the availability of the solar investment tax credit (ITC). The opportunity for the best returns, however, has a limited lifespan as the ITC is set to expire at the end of 2016.
To address the distinct needs of IOUs, CEC’s new community solar program provides the utility the ability to own the solar system so that the asset can be included in their rate base. Meanwhile, the federal ITC is monetized and cash proceeds are returned to the utility on a schedule that tracks the associated revenue requirement. CEC continues to provide the expertise and services necessary to make the community solar program a success. The result is a program that offers utilities a competitive return and positive NPV (net present value) from their solar investment without requiring a cost-shift to non-participants, thus creating no upward pressure on rates.
Not only does the utility benefit from this structure, it also translates to a better customer experience in the form of lower participation costs, favorable program-term lengths, and a faster payback period. As a result, utilities are able to meet market demands for renewables, regulatory requirements and achieve respectable margins.
“Many regulated utilities have viewed solar ownership as a challenge to a prudent RE strategy,” said Mr. Spencer. “Through this new community solar model, IOUs can now effectively rate base community solar assets on their grid without the risk of cross-subsidization.”
With more than 130 MW of roofless community solar projects built or under development with 25 utility partners, CEC has demonstrated its expertise in timely and successful development across numerous environments and is uniquely positioned to help IOUs capitalize on this limited opportunity. “With the ITC expiration on the horizon, we are getting these projects moving throughout the country and across the finish line as quickly as possible,” Mr. Spencer added. Programs under regulatory consideration and solar projects already within development are also strong candidates for CEC’s IOU rate-based community solar offering.