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Shared Solar: National Overview

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Shared solar (aka community solar) solar has the attention of states, regulatory commissions, and utilities across the country. Best practices and success stories are emerging, but the market still remains relatively small. What's more, as the model gains traction, this relatively new sector of the solar industry is meeting new growing pains. In her presentation at Intersolar North America 2016, Erica McConnell shares what's happening across several states to scale the model to reach more consumers and new markets, including low-income customers.

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Shared Solar: National Overview

  1. 1. Shared Solar: National Overview Erica S. McConnell Attorney, Shute, Mihaly & Weinberger LLP July 12, 2016 Scaling Shared Solar: What’s Working, What’s Not & What’s Next Intersolar North America
  2. 2. • Independent, non-partisan, national non-profit organization founded in 1982 • Non-industry voice and non-lobbying • Our focus: Expand access to reliable, affordable clean energy for all consumers • Workforce Program: Ensure a qualified, job-ready clean energy workforce • Solar Career Map • National Coordinator, Grid Engineering for Accelerated Renewable Energy Deployment (w/ EPRI, SEPA, US DOE) • Credentialing Program: Develop national education/training standards, best practices, and credentials • National Administrator, Solar Instructor Training Network (US DOE) • ANSI-Accredited National Standards Developer • Regulatory Program: State regulatory engagement on distributed energy resource policies • Model rules, national best practices, policy innovations www.irecusa.org | @IRECUSA © 2016 IREC 2
  3. 3. IREC Regulatory Activity 2007-2015 IREC Current Regulatory Engagement IREC’s National Regulatory Engagement © 2016 IREC DC IREC is represented by the law firm Shute, Mihaly & Weinberger LLP 3
  4. 4. 1 2 3 4 Defining Shared Renewables: Guiding Principles © 2016 IREC 4
  5. 5. Terms and Nomenclature • Nested within NEM program • Based on participant’s retail rate Virtual Net Metering (VNM) Investment-Based Models • Participants receive cash return, rather than bill credits • Investment-based, e.g., through an LLC Green Tariff Programs • Often relies on distant REC purchases • No rate hedging, usually premium These can all be “community solar” © 2016 IREC 5
  6. 6. Based on IREC research as of September 2015, www.irecusa.org National Shared Renewables Landscape DC + many voluntary utility programs on the horizon © 2016 IREC 6
  7. 7. Key Program Attributes  Program size  Administration and ownership  System/facility  Size, location and siting requirements  Number of participants  Participation  Term and eligibility requirements  Portability and transferability of subscriptions  Allocating the benefits of participation  Bill credit valuation  REC ownership and valuation  Unsubscribed energy  Portability and transferability of subscriptions © 2016 IREC Plus simplicity, comprehensibility, and attractiveness for customers 7
  8. 8. Facility Ownership & Administration • Direct ownership—customer(s) own • Third-party ownership/administration • Utility ownership and/or administration – Mostly seen in voluntary utility offerings (vs. state-wide programs) – Some competitive programs allow for utility ownership—but not in practice to date (MN, CO) • Policy Considerations Financing options available for facility Benefits to customers of competitive offerings Fair competition—utility ownership through affiliate © 2016 IREC 8
  9. 9. Bill Credit Valuation • Embedded-cost-based approach—based on existing retail rates – Generation, transmission, and distribution – Can get complicated with TOU rates and non-kWh components, e.g., demand charges • Value-based approach—value of solar rate – Costs = lost revenue, admin. costs, incentives – Benefits = avoided generation costs, avoided line losses, capacity benefits, avoided T&D costs, avoided environmental compliance costs, other benefits, etc. IREC Model Rules provide language for both approaches © 2016 IREC 9
  10. 10. State Program Year Launched Program Capacity Limit System Capacity Limit Bill Credit— kWh or $ Bill Credit—Value CA GTSR/ECR 2015 600 MW 20 MW $ Compilation of statute-mandated costs and credits CO CSG 2011 2011-13 = 6 MW per year 2014-16 = 6.5-30 MW per year 2 MW $ Total Aggregate Retail Rate = base energy, demand charges and other riders; excludes T&D, customer charge, DSM, RESA DE CS 2011 5% of a utility’s aggregated customer monthly peak demand 2 MW $ (?) Same feeder = full retail rate Different feeders = supply service charge MA VNM 2009 15% of system peak load (7% private, 8% public) 2 MW (10 MW for gov’t) $ All but Class III = full retail rate; Class III = energy, transmission, transition (but recent legislation will change this) MN CSG 2014 None 1 MW $ Full retail rate plus REC adder depending on size (but VOS & other changes under consideration) NY CDG 2015 (NY NEM caps currently lifted) 2 MW kWh unless demand- metered, then $ Full retail rate (but “LMP + D” and other changes being discussed) © 2016 IREC State Programs at a Glance 10
  11. 11. Emerging Issues • Consumer protection, including mandatory disclosures & other transparency measures • Low- to moderate-income (LMI) customer access and participation – Along with consumer protection, relevant beyond shared solar • Facility siting to maximize grid benefits – Intersection with interconnection and grid modernization efforts – Also valuation proceedings © 2016 IREC 11
  12. 12. State Program Year Launched LMI Component? Siting Requirements CA GTSR/ECR 2015 Yes Same municipality or county, or within ten miles of the customer’s address CO CSG 2011 Yes Same or adjacent county DE CS 2011 No Same utility service territory; bill credit varies by location MA VNM 2009 No Same utility service territory MN CSG 2014 No Same or adjacent county; co-location limitations NY CDG 2015 Yes Phase 1 = "Opportunity Zones" and 20% low- income projects Phase 2 (May 1, 2016) = unrestricted Emerging Issues at a Glance © 2016 IREC 12
  13. 13. IREC Resources Both available at www.irecusa.org/regulatory-reform/shared-renewables © 2016 IREC 13
  14. 14. Additional Resources © 2016 IREC • IREC Consumer Protection Trio www.irecusa.org/consumer-protection • IREC Shared Renewable Energy Program Catalog (update coming very soon) www.irecusa.org/regulatory-reform/shared-renewables • US DOE/White House Community Solar Partnership http://energy.gov/eere/solarpoweringamerica/national-community-solar- partnership • US DOE Solar Market Pathways www.solarmarketpathways.org • National Renewable Energy Laboratory www.nrel.gov • Shared Solar: Current Landscape, Market Potential, and the Impact of Federal Securities Regulation www.nrel.gov/docs/fy15osti/63892.pdf 14
  15. 15. Thank you Erica S. McConnell Attorney, Shute, Mihaly & Weinberger LLP mcconnell@smwlaw.com Sara Baldwin Auck IREC Regulatory Program Director sarab@irecusa.org

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