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State Laws Impose Limits on Community Solar

Most residential roof space is not optimal for solar panels. Only 22-27% of residential buildings in the U.S. are viable for solar panel installation, according to a study by the National Renewable Energy Laboratory. This has inhibited the access of many communities to renewable energy sources that they demand. Community solar projects give those American homeowners or renters an opportunity to volunteer to invest in solar energy generation, whether it be for clean power or a financial benefit. These projects can be owned by a utility, a group of community investors, or a non-profit organization. While these community solar projects are growing in popularity nationwide, a recent string of limitations has popped up in response to utility companies and local governments. These limitations decrease the effectiveness of these programs.

In Minnesota, a utility-owned system has recently limited the size of proposed co-located community solar gardens to five one-megawatt gardens per site according to Minnesota Public Radio News. MPR News reported that Xcel Energy, the utility that owns the system, reasoned that without the restriction, the costs incurred would reach an estimated $100 million per year and the burden to pay would fall on its customers. This has become exceedingly difficult for the developers who have submitted proposals that were based on the former state restrictions and whose proposals are no longer permitable. MPR News quoted the CEO of Excel Energy who promised a “public process” was to follow over the next 30 days for members of the community to have a voice in the decision.

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Communities in the Northern Berkshires of Massachusetts are also facing restrictive net metering regulations that have slowed solar energy development in the area. Net metering refers to the exchange between solar panel owners and utilities in which solar energy produced from the panels is directed to the grid and the owners or investors are compensated through energy credits from the utility.

The current net metering limit in Massachusetts is 800 megawatts according to the Berkshire Eagle. The news outlet cites a report by the Environment Massachusetts Research and Policy Center that lists many advantages that increase solar energy production has for utility ratepayers. These advantages include reduced infrastructure costs due to greater supply of energy, reduced exposure to volatile rates for fossil fuels and access to a rate for renewables that is far more stable, as well as the environmental benefits associated with renewable, clean energy. The Berkshire Eagle also quotes the President of Berkshire Photovoltaics Services as having explained that “utility companies are likely to try to inhibit the growth of solar because as energy supplies grow, profit margins shrink and shareholders start to feel the pain of fewer profits.”

Even our nation’s capital has had a rocky start initiating community solar projects in the area. Washington DC’s new legislation passed in 2013 allowing community solar has recently been regulated by the Public Service Commission, and according to the DC SUN has restricted net metering credits to half of their true value. The DC SUN, or DC Solar United Neighborhoods, created a petition for residents to sign urging the DC Council to enact legislation that corrects this imbalance, and a vote has been postponed for the time being.

Community solar developers and investors have hit many obstacles over the past few months in their pursuit for access to renewable energy, but the restrictions they’ve faced represent the growing demand for solar power across the country. Eventually, supply can meet demand and these communities can reap the benefits that locally produced renewable energy sources provide.

Jul 8th 2015

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