‘Solar gardens’ could meet half of U.S. PV power by decade’s end — NREL

Source: Daniel Cusick, E&E reporter • Posted: Wednesday, April 29, 2015

A new analysis from the National Renewable Energy Laboratory finds that shared photovoltaic (PV) solar systems — also called community solar projects or “solar gardens” — could account for one-third to one-half of all solar PV power in the United States by 2020.

Achieving such robust growth will depend on a variety of factors, according to NREL energy analyst David Feldman, the report’s lead author. They include the continued expansion of net metering and other utility programs encouraging solar adoption, rising customer awareness of solar’s costs and benefits, and the ironing out of financial and regulatory issues that have effectively locked half of U.S. households and businesses out of the solar marketplace.

“Historically, PV business models and regulatory environments have not been designed to expand access to a significant portion of potential PV system customers,” Feldman said. “As a result, the economic, environmental and social benefits of distributed PV have not been available to all consumers.”

Those who have been left out include millions who live in multi-family housing or are business tenants of commercial buildings, homeowners with limited solar capacity due to shading or other locational problems, people who cannot afford to purchase or lease solar systems, and those whose interest in solar runs up against policies prohibiting or limiting distributed generation.

“If federal, state and local policies can institute a supportive regulatory environment, shared solar presents an area of tremendous potential growth for solar photovoltaics, expanding the potential customer base to 100 percent of homes and businesses,” the analysis states.

That translates into 5.5 to 11 gigawatts of new solar power deployed in the United States between 2015 and 2020, and an additional $8.2 billion to $16.3 billion of cumulative investment, according to NREL.

In a telephone interview, Feldman said such numbers are realistic given the pent-up demand for solar and other forms of generation in cities, suburbs and rural areas across the United States. “There are multiple geographies that can benefit from this development model” he said. “It’s certainly a good option for residents in multi-tenant or high-rise buildings, but it’s also available to people in more rural areas who simply don’t have good roof exposure to the sun.”

The analysis further notes that shared solar projects may be more attractive to residents and business owners because it is more fungible than ownership of an on-site PV facility. “Having an easier exit option over the lifetime of the solar investment may make it more attractive to potential customers,” the authors said.

The paper also examines questions about financial issues surrounding community solar projects, including whether such projects are viewed as securities that are subject to federal securities regulation.

The authors concluded that “shared solar offerings that are marketed and structured to reduce customers’ retail electricity bills are less likely to be treated as securities than those marketed and structured primarily as profit-generating programs.”

The analysis was funded by the Energy Department in support of its ongoing SunShot Initiative.