At this point, it’s impossible for even the most ardent old school energy guys to hide from the bright sunny truth that solar energy is blazing a new path in the U.S. It’s easy to choose from a multitude of statistics that support this point. For example, as of the third quarter of last year, solar had made up more than 1/3rd of all new generating capacity built in the country. That would have been unimaginable just a few short years back. Here’s another – 6,500 MW of solar was expected online for 2014, a 36% growth over the previous year. And one more – the industry is 3x as big as it was just three years ago and growth is only expected to accelerate.
Solar’s growth has been fueled by on-site installations on commercial, government and residential properties as well as utility scale projects. These two drivers will continue to fuel growth, but there’s a third driver that could open up the market to an even broader consumer base. I’m talking about something that’s typically referred to as “Community Solar” or “Solar Gardens.” Simply, a Solar Garden is a solar project that feeds its energy to the grid and is sold to a group of subscribers. In the residential space, a homeowner may take a 5 KW subscription, which would be the size of an average home installation. The beauty of a Solar Garden is that it opens solar to people who live in apartments, don’t have a good roof for solar (ie. too much shade), and maybe don’t have a high enough credit score for a 20 year lease on their own roof. It also opens solar for businesses, faith institutions, and other organizations that don’t directly pay their electricity bills, or are in a lease situation.
It’s a really exciting new development and it doesn’t take new technology to make it happen. It’s just a matter of changing a state’s law to allow virtual net metering, which is a cousin of net metering, one of the key regulations that allows solar to flourish. That’s the process whereby you are able to get credit for excess solar production at your site, meaning that you are figuratively spinning your meter backwards. Virtual net metering works the same except that the solar you are getting is off site. When you use less power than your subscription, you would be credited for the excess power.
If you don’t think this could be a big deal, just think of all those apartment dwellers in New York, Washington, DC, San Francisco and other cities. Combined with the non-residential space, this would millions of new potential consumers to the solar market. And it’s not just wishful thinking. Colorado, Massachusetts, and Minnesota already have Solar Gardens or Community Solar laws, and the market is hot, as one recent headline noted, “In Minnesota, community solar market starting to take off.” Maryland has a chance to adopt an authorizing bill for Community Solar this year. Other states are also considering action.
The momentum for Solar Gardens is going to build over the next couple of years. It just makes too much sense from a policy and consumer perspective. A simple change of net metering to include virtual net metering is all it takes in a state that already is favorable to solar. The bright sunny truth of a rapidly growing solar market is about to get even brighter and sunnier as Community Solar opens the door to millions of new solar consumers.