Solar Gardens Continue to Forge New Solar Industry Territory
Back in August we published a piece on the features and benefits of solar gardens. Ideally, a community solar garden is located in-city (but not necessarily on the actual property of the system subscribers), in-county, or within the managing utility's service area, and allows groups of individuals to co-own or lease a part of a solar array and collectively share the benefits.
Many critics of the solar energy movement have raised concerns about solar being financially inaccessible for most people and further limited to more solar-viable areas (for example, if your roof is shaded, you might not qualify for available solar grants and tax incentives). Together with virtual net metering, the solar garden movement allows low-income, multi-unit dwellings, and other locations that do not lend themselves to solar to finally have the same opportunities to benefit from solar energy.
Solar gardens are still somewhat of a new concept, with many states and utilities lacking policies to address (or even allow) communal ownership and credit-sharing. Traditionally, homeowners or apartment building tenants were not eligible for solar tax incentives, most notably, net metering.
Net metering allows a home or business owner with a solar array on their roof to sell excess electricity generated back to their utilities’ power grid. Any electricity sold back to the grid then shows up on their electric bills as credits, which are deducted from their overall utility bills. In the past, net metering regulations required the solar array generating the excess electricity to be linked to a single utility customer’s account as well as physically attached to the roof of the customer’s building. So, for communally-owned solar systems, there was no option to share the credits.
This new communal ownership strategy got solar industry experts and legislators thinking... and several different states have come up with updates to current net metering policies. Collectively known as virtual net metering, communally-owned solar systems now have the option for subscribers to receive the same benefits as single-owner systems.
In its simplest form, virtual net metering is an electric incentive that allows net metering credits generated by a solar array to be shared between all the subscribers of a co-owned system. Though virtual net metering may allow for system co-owners to share credits, most policies originally required that the PV system be physically attached to the owner’s building rather than accommodating system sharing and accrual of benefits of a community solar garden to participants or shareholders.
A few progressive legislators have recognized this flaw in the VNM system, and several states have so far implemented virtual net metering policies which allow for the creation of off-site, communal solar arrays like solar gardens.
- Net Metering and Multifamily Affordable Solar Housing (MASH) Program
System Size Requirements
- Up to 1 Megawatt (MW) for residential and local government systems
Who May Apply
- Local Government – must receive electricity under a time of use tariff and all subscriber accounts must be owned by the same company
- Residential (MASH) – Residents of affordable housing property.
- Net Metering and the Community Solar Garden Act
System Size Requirements
- Up to 2 MW for community solar gardens
- Up to 25 KW for municipal utility customers
- From 2 MW up to 120% of the customer’s annual average electrical consumption for investor-owned systems
Who May Apply
- Community Solar Gardens – array must be located in the territory of investor-owned utilities, have a minimum of 10 subscribers and must be owned by the utility, for-profit or nonprofit.
- Municipal – all utilities with more than 5,000 customers must offer net metering
- Investor-owned – systems sized up to 120% of the customer’s annual average electric consumption utilizing qualifying renewable energy resources
- Net Metering and Neighborhood Net Metering Program
System size Requirements
- 1-2 MW for residential systems
- Up to 10 MW for municipalities/government entities
Who May Apply
- Residential – 10 or more residential customers in a single neighborhood served by a single utility
- Municipal – any net metering facilities run by a municipal or government entity with a system output of up to 10 MW
- VNM is also allowed in OR, NY (agricultural) PA, RI, UT, VT, WA, WVA, & CT
While only a handful of states have adopted VNM friendly policies so far, the benefits they offer to community solar gardens and other system subscribers is rapidly being utilized. Will this be an eco-friendly policy change quick to be recognized and adopted by other states? We certainly hope so.