The Biden administration wants 5 million homes to be powered by community solar projects by 2025, representing a 700% increase from 2021 capacity. Interconnection delays and a lack of transparency from utilities threaten that target, according to a leading developer.
Scott Wiater’s perception of community solar has evolved.
As president and CEO of Standard Solar, now one of the largest developers and owners of community solar projects in the U.S., Wiater said he avoided getting involved in community solar for as long as possible.
“It’s just so much easier to have a single offtake, long-term contract. That was a good business model,” Wiater said, noting Standard Solar’s transformation from residential to commercial development in 2008 when he joined the company. He said that policies have shifted and likely will continue to shift.
Standard Solar jumped into community solar development in 2018 as policymakers recognized the benefits of a subscription model for clean energy. Now, at least 19 states and D.C. have established policies and programs to support community solar adoption, according to the Solar Energy Industries Association trade group.
Growing community solar depends largely on policy expansion. Otherwise, community solar-type projects receive wholesale rate compensation, making them economically unviable in most cases.
The outlook for community solar is improving, according to market analysts. On Feb. 8, energy research consultancy Wood-Mackenzie raised its 5-year forecast for community solar capacity in the U.S. to 4.5 GW, up by 9% from its earlier outlooks. The revision was due to expanded community solar programs in New York, New Jersey, and Illinois, as well as new programs in Delaware and New Mexico.
“Policymakers are heavily influenced by utilities, and I think utilities are more comfortable with community solar (than a distributed residential model) because it’s easier to plan,” Wiater said. He said that developers favor it because they don’t have to worry about the offtakers. “They just have to worry about getting site control with good interconnection and they have a solar project.”
‘Through the roof’
The latter piece of that equation — interconnection — is an increasingly burdensome challenge, Wiater said. On top of delays, developers pay the brunt of grid upgrade costs to support interconnection and have little knowledge of what their money is paying for.
Wiater said he believes the lack of transparency by utilities is one of the biggest threats to growing community solar. The Biden administration, meanwhile, hopes to expand community solar capacity by 700% by 2025, enough to power 5 million American homes.
Wiater said that utilities “just tell us what they’ve spent and we pay the bill.” He said that little transparence exists to those costs and developers have little alternative but to pay them.
Wiater acknowledged that utilities have an obligation to study how community solar projects impact the grid and their customers. But without an improved interconnection process, national community solar capacity targets face an uphill battle.
“We are way behind coming close to (the Biden administration’s) goals unless we start acting super aggressively now,” he said. “We have to figure out how to do everything quicker if we’re going to meet any of these climate change goals that have been put in front of us.”
The Biden administration’s goal of powering 5 million American homes with community solar by 2025 was informed, in part, by developers like Summit Ridge Energy, which weighed in on the process.
Jason Spreyer, Summit Ridge’s executive vice president of business development, said the goal may be lofty, but is attainable. And goalsetting like the White House’s target will help move the needle.
Spreyer added that key to reaching the federal community solar target is access to new markets.
“How we’re trying to facilitate that is a number of our team members are very active (driving policy) in those states,” Spreyer said in an interview with Renewable Energy World. “They are part of the leadership in those markets.”
Issues relating to interconnection and siting are not new. And Spreyer said the Wood-Mackenzie forecast was reassuring and highlights the progress that is being made to expand community solar access across the country.