Despite the astonishing increase in the number of Community Solar installations over the past few years in New York and across the United States, the general awareness of community solar remains very low. With this level of growth and general lack of awareness, you may be wondering what is community solar exactly and how do these programs work?
We’ve included some answers to your most burning community solar questions, including the advantages, energy valuation, subscription process, customer management, and allocation rules.
1. What are the benefits of Community Solar to businesses and individuals?
In short, Community Solar offers the best features of rooftop or onsite solar installations but without many of their drawbacks. The primary benefit over onsite installation comes from the cost-benefit relationship. Community Solar requires no installation of solar panels on your property, and, as a result, there is no capital outlay to get started. The benefit comes from the associated savings, which starts as soon as the project is operational. Most community solar programs offer a discount up to 10% of your monthly energy costs.
For large consumers of energy, there are additional options beyond community solar that may be more appropriate for their energy needs, such as a Power Purchase Agreement (PPA). Community Solar programs are limited to 5 MWs in New York State, and there are similar limitations in other states. One subscriber can also have no more than 40% of the project power, and we have to sign up at least 10 subscribers onto a single project. A large energy user may exceed those limitations. In those cases, we offer a similar value but within a distinct framework.
2. How is the subscription or energy valued in a Community Solar program?
Community Solar subscribers support the development of large solar projects that inject power directly into the grid but do not receive power directly from the project. Instead, they receive a share of a solar project that is allocated to them (see more below for how solar project allocation works). The size of their share is calculated through the value of their bill.
Each kWh has a value assigned to it according to the state rules where the power is produced. In New York State, the energy is valued according to the value stack, also known as VDER, which uses a variety of factors to determine the specific price. For more information on the VDER credit, please take a look at this short read.
3. How is my portion of the solar project allocated to a Community Solar project?
We take into account first your utility region and the load zone (NYISO) before we assign your portion to a Community Solar project. After we find a suitable project that meets those primary requirements, we evaluate your energy usage to determine if there is room in the project to accommodate your needs.
We prefer to analyze around 12 months of energy usage data, which gives us the most accurate picture based on seasonal variances in usage. Analyzing only the summer months may give us an inflated understanding of your consumption. That number includes only those times when energy consumption is at a higher rate, for example, when air conditioning is running at full tilt.
Once we know what your annual energy consumption is, we assign you bill credits to offset your energy usage. That would amount to, in most cases, 100% of your bill.
4. What is the subscription sign-up process, and does it differ between businesses and individuals?
The subscription process is relatively straightforward and is based on your energy needs and utility. Once we have allocated your energy needs to a project in your utility area, you are ready to sign the subscription agreement. It’s a contract that lays out the length of the subscription in addition to cancellation terms. After you have reviewed the agreement and signed it, your subscription is set up on your end and requires no additional effort. It will automatically start as soon as the project is operational.
5. Once the subscription is active, how are the billing and other customer management inquiries handled?
There are two methods to billing, depending on your utility. Some utilities have adopted consolidated billing, which means your credits and discounts are applied directly to your utility bill and appear as a line item. You will pay the utility bill and receive your savings at the same time.
Some utilities have not yet implemented consolidated billing. In this case, you will receive two bills. On your regular utility bill, you will see the full amount of your credits applied to your energy costs to offset your share of the project. Typically, the credits have been allocated to offset 100% of your bill. The second bill comes from OYA Solar, and this one includes payment for your credits plus the 10% savings on bill credits.
The process for subscribing to community solar is relatively the same for businesses, organizations, and residents. Where complexity comes in depends on the decision-making structure in your organization. For most households, the decision is relatively easy – the cancellation terms are friendly, and the benefits come at no cost. For businesses and other organizations, the financial benefits of community solar and its lowered risk should be an easy sell to decision-makers.
If you would like to learn more about community solar, contact us and we’ll answer your questions.
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