Community Solar Beginnings

With a population of 18,000, the City of Ellensburg is home to one of the oldest municipal utilities on the west coast of the United States. It was there in 2006 that the first community solar project in America was born.

Under the plan, local residents would make up-front payments to help fund the construction of a new solar project to be built on City-owned land near some soccer and baseball fields. In exchange, the residents would receive a portion of the energy to be generated by the system. Instead of physically wiring the project to each customer’s home, the idea was to send the electricity into the utility grid, while providing each customer with a bill credit equal to their share of the project’s energy production. This created a new source of solar energy production, just as if the panels were installed on a customer’s roof. But now, the customer’s roof was no longer a limiting factor, since the project could be built anywhere. The project, originally a 36 kilowatt (kW) system and later expanded, has been serving the needs of about 100 local customers ever since.

Soon after this first project went into service, policymakers in other places saw the potential of community solar, and began to experiment with interesting variations of the model.

These early community solar programs were pioneering a new model of sharing solar energy and expanding the market for solar.

In 2008, regulators in California recognized that the benefits of solar were unattainable for low-income residents in apartment buildings or complexes who rented their units (and thus did not have the right to install solar panels on their roofs). This led the California Public Utilities Commission to enact the multifamily affordable solar housing (MASH) initiative. This program allowed low-income residents in multifamily housing to receive bill credits from a single solar system located on the roof of their building. This model of community solar has become known as “virtual net metering.” It shares the attributes of traditional “net metering,” in which a solar customer receives a bill credit (often equal to their retail bill rate for energy) for a solar system that is located on their roof. But it expands this concept to allow multiple customers within a single building or complex to share the credits for the energy generated by the solar system.

Around the same time, Massachusetts enacted an even more creative version of the community solar model. Under the name of “neighborhood net metering,” a customer who installed solar on their roof could agree to provide a portion of the energy generation to no fewer than 10 nearby residents. In effect, the program created the first peer-to-peer energy sharing program for neighbors. The program was praised for its flexibility and for bringing the benefits of solar to a wider market.

Further policy evolution followed in places like Maine and Vermont. There, policymakers were responding to a growing sense that community solar was losing its “community” feeling, as third party solar companies were coming in and building ever larger projects. In true New England fashion, the response was a requirement for greater local ownership and control.

For instance, in 2009, Maine created a pilot program to require local residents to own at least 51% percent of all new community solar installations. The program also placed a 10 megawatt (MW) cap on the total project size in an effort to keep projects smaller. Similarly, Vermont’s 2012 policy allowed groups of customers to organize themselves into cooperatives to provide local residents with control over the construction and operation of community solar projects. Of particular interest was controlling decisions on where the projects would be located, so as to avoid unnecessary loss of productive farm land.

These early community solar programs were pioneering a new model of sharing solar energy and expanding the market for solar. While community solar was clearly building momentum in the northeast and northwest, it was Colorado that helped community solar to burst onto the national scene.