We recently discussed how natural disasters are highlighting the need for a more stable, secure energy infrastructure. This includes the development of microgrids, which can provide renewable energy to homes in remote locations, energy independent college campuses, hospitals, neighborhoods, or other complexes that would rather not rely on an unstable power grid. In the case of neighborhoods (or even small towns), this is often known as “community solar” - whether pioneered by developers or neighborhoods themselves, these microgrids are often funded based on a subscription model.
Think of it like Netflix for solar energy: for a fee, consumers can buy into a microgrid offering renewable energy to their home or business and benefit from access to a secure power source without the up-front costs associated with creating their own solar installation. As GreenTechMedia notes, “Advocates say (this) model — which, done right, can widen solar availability for the 50 to 75 percent of Americans who don't have the option of installing their own system — should play a central role in clean energy policies going forward.” What could this mean for potential solar consumers?
Netflix for Solar
For consumers who either lack the capital or the option to install their own solar panels, such as those living in apartment buildings or in heavily shaded areas, subscribing to a community solar provider can offer utility savings as well as access to green energy. Accessibility is a core element of the community solar model, and as these projects move out of the “pilot” phase and into more widespread use, providers are learning how to make the subscription process simpler and more effective.
As EnergySage explores, there are a few different billing models currently being tested by community solar providers:
The “Cooperative” model relies solely on participants to fund the installation and maintenance of solar panels, storage components, and distribution infrastructure. Some states currently require community solar projects to be financed by their beneficiaries, whether through up-front payments or solar loans. Participants then receive solar net metering credits proportional to their investment in the community solar project. Once enough credits have accumulated to pay off a consumer’s initial investment, they continue to have access to power produced through the system they helped to finance.
The Subscription model allows consumers to enter a Power Purchase Agreement with a community solar provider that gives them access to power generated by that provider. “Most subscription-based community solar programs promise either immediate or eventual savings on your electricity bill,” EnergySage notes, while some are focused primarily on delivering an environmentally-friendly alternative to utility companies.
There are many potential pricing models within a PPA subscription. These can include set discounts over the local utility rate, a flat rate per kWh used, flat monthly fees (like a Netflix subscription), lease-to-own agreements, and more. For consumers, it’s smart to research how each pricing model will impact savings and consider the best option for their individual situation.
Accessibility is Key
Subscription models for solar power have the ability to expand renewable energy’s reach to consumers who lack the initial capital to invest in their own solar system, those who live in areas without access to enough sunlight to make solar feasible, and those who rent a home or live in an apartment complex or large, multi-tenant building.
At Solar Design Studio, we’re excited to see solar energy reaching new corners of the energy market. As experienced solar project developers, we’re looking forward to the opportunity to partner with communities or developers on community solar solutions. If you’d like to learn more about community solar development, or any other aspect of today’s wide range of solar solutions, contact us today!