Utility-Scale Solar By Subscription

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Written by Nora Caley
on April 30, 2014 No Comments
Categories : E-Features

In April, Xcel Energy filed a proposal with the Colorado Public Utilities Commission (PUC) to offer ratepayers short-term solar subscriptions through its Public Service Co. of Colorado subsidiary to obtain solar energy from a yet-to-be-built 50 MW photovoltaic facility.

According to the PUC filing, the new Solar*Connect subscription program would build on the utility's existing programs – Solar*Rewards for small installations and Solar*Rewards Community for solar gardens.

Customers who opt for Solar*Connect may pay to displace up to 100% of their previous year's electricity usage with solar energy. Under the arrangement, subscribers pay a Solar*Connect charge and also receive a Solar*Connect credit. The utility says the program will help people meet their desired solar energy needs.
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‘It is really another option for customers to participate in solar and get the solar that they want,’ says Eric Van Orden, product developer for Xcel.

The PUC is expected to rule on the Xcel proposal in about nine months.

The proposed program might sound like community solar, but there are certain details that make it different from other shared solar programs. One feature that makes Solar*Connect different from other community solar programs is its size, says Ryan Edge, research analyst for the Solar Electric Power Association.

‘They are using their buying power and economies of scale to buy one large system,’ he says. ‘At 50 megawatts, it is magnitudes larger than rooftop solar, so customers can potentially get a better deal per kilowatt.’

Another difference, Edge says, is that Solar*Connect would be offered to residential and commercial customers, rather than being restricted to one particular class of ratepayers. This distinguishes it from community solar programs, which typically are not available for commercial customers due to more complex rate calculations.

Other industry experts point out that Xcel's proposal boosts solar power without competing with solar developers.

‘We are always positive about additional renewable energy being deployed,’ says Tom Sweeney, chief operating officer of Carbondale, Colo.-based Clean Energy Collective (CEC). ‘In this case, we don't believe what Xcel is doing is competing with our community solar model.’

In a community solar model, a developer – not a utility – builds a solar garden. Customers buy an interest, often marketed as a number of panels, so they can share in the bulk-purchasing power without having to build a solar array on their own property.

Sweeney says the arrangement has certain benefits, such as tax credits, that the Xcel model does not offer. CEC works with Xcel on the Solar*Rewards Community program, and customers receive monthly electric bill credits and quarterly renewable energy certificate payments. The proposed Solar*Connect program is different, Sweeney says, in that the utility wants to sell direct power to ratepayers at a premium.

He thinks Xcel's program is analogous to the utility's Windsource program, wherein customers pay a premium in addition to their regular electricity bill, and the extra money supports wind power development.

The concept of shared renewable energy arrangements has been around since 2006, according to the Solar Energy Industries Association (SEIA), which lists a number of models that shared renewables can take:

  • Utility sponsored – a utility provides customers with the option of buying renewable energy from a shared facility, with a long-term contract;
  • On-bill crediting – customers invest in a shared renewable farm, and their bill reflects a credit for that portion of the energy from that facility;
  • Special-purpose entity – individuals join together to develop a renewable energy project; and
  • Buy a brick – people donate to a shared renewables installation that a charity owns.

‘We are carefully reviewing Xcel's proposal in hopes of getting a better understanding of its practical effect on Colorado consumers,’ says Ken Johnson, SEIA's vice president of communications. ‘Generally speaking, we support community and shared solar programs. But we also encourage a diversity of market participants and ultimately recommend programs that provide meaningful savings to customers.’

Energy companies offer many variations of community solar, says Scott Fisher, director for new business at NRG Energy. What the programs have in common, he says, is they help limit the costs of solar to only the customers who want solar.

‘The way utilities view it is there is always some criticism with solar programs that they benefit the wealthier customers,’ Fisher says. ‘These programs are a way to get around that in a positive way because you are selling solar to people that want it.’

NRG recently piloted such a program in Rutland, Vt. NRG Residential Solar Solutions, a subsidiary, began construction on a 152 kW solar array. Fifty customers of the local utility, Green Mountain Power, enrolled to each receive 3 kW of energy from the project.

‘It is not a lease, but a 10-year agreement,’ Fisher says. ‘They pay a fixed amount every month, and it essentially gives them a credit on their utility bill, just like if they had solar on the roof.’

In Texas, NRG launched SolarSPARC with Green Mountain Energy (not related to Green Mountain Power in Vermont). In the Texas program, for every customer that signs up, Green Mountain Energy will contribute $4 a month to build new solar projects. The customer receives a rebate of $11 every six months.

Regardless of the label, Fisher says subscription-based solar power is a just another way to deliver value to the customer.

Nora Caley is a freelance writer based in Denver.

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