Community Solar Is Coming For Your Fossil Fuels

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For all the sound and fury unleashed upon rural solar developers, the clean kilowatts just keep coming. The agrivoltaic movement is one factor helping to undercut the opposition, and now here comes the rip-roaring community solar trend adding more fuel to the fire.

More Community Solar Projects In The Pipeline

Ratepayers in Colorado are credited with sparking the community solar movement back in 2010. The basic idea is to help ratepayers get access to clean power, even if they don’t have the opportunity or desire to install solar panels on their own property. Instead, they can subscribe to a relatively modest solar array located nearby.

In the early days, when solar power was relatively expensive, community solar subscribers had to be willing to pay a little extra for their clean power. Now that the cost of solar has dropped, subscribers can expect to pay less, and the popularity of community solar has skyrocketed.

The Inflation Reduction Act has also kicked in. In July, for example, CleanTechnica took note of the leading solar developer Nexamp, which credits the IRA with enabling it to ramp up the activity level. Nexamp has begun planning for about 400 new community solar projects around the US in the coming years.

Microsoft Hearts Community Solar

The movement got another shot of adrenaline earlier today, when Microsoft announced a five-year, 500-megawatt deal with the community solar specialist Pivot Energy. Under the partnership, Pivot expects to bring 150 new solar arrays to life in about 100 different communities spanning Colorado, Maryland, Illinois, Delaware, Pennsylvania, Ohio, and 14 other states.

There being no such thing as a free lunch, the agreement calls for Microsoft to purchase renewable energy credits for the 20-year life of the project. That shoots both Pivot into the big leagues of the REC field, while also enabling Microsoft to claim credit for smaller clean power projects that fall into the distributed energy category.

“The agreement represents Pivot’s largest Renewable Energy Credit (REC) agreement and most significant community impact collaboration” Pivot explains.

“This also marks Microsoft’s first major distributed generation portfolio,” Microsoft notes.

The REC angle can be somewhat problematic. Critics point out that corporate REC buyers can deploy them to maintain a business as usual scenario rather achieving real cuts in their emissions. To be effective, RECs need to be deployed as part of a meaningful decarbonization strategy. In the case of the community solar partnership, for example, Microsoft intends to apply its RECs to reduce Scope 3 emissions, which refers to the energy used by ratepayers who deploy the company’s products.

The First Rule About ESG: Don’t Talk About ESG

If you caught that thing about “community impact collaboration,” that’s corporate-speak for doing good while making money.

The doing of corporate good is an old idea that goes back to 19th century conventions of charitable giving. In the 20th century, the more holistic concept of corporate social responsibility took hold.

More recently, the ESG (environment, social, governance) movement has been promoting a more rigorous, data driven, and transparent approach to corporate social responsibility reporting. That has drawn the ire of public officials in about two dozen Republican-dominated states, where new laws and threats of legal action are aimed at discouraging renewable energy investment (see more ESG background here).

I’ve been to a number of corporate events over the past year or so where participants have affirmed that they still follow ESG principles, but they avoid saying “ESG” to their clients because they don’t want to deal with the partisan political baggae. They use alternative language instead, and the new community solar collaboration is a perfect example.

“This significant, impact-driven collaboration supports both Pivot’s and Microsoft’s commitment to maximize the environmental and social benefits of the renewable energy transition at the local level,” the two companies explained in a press release dated August 8, in which the the acronym ESG cannot be found (emphasis added here and below).

“This collaboration takes Pivot’s community impact commitment to a new level, with each solar project including significant community benefits,” Pivot explains.

“We are honored to collaborate with Microsoft to provide purpose-driven solar energy,” affirms Pivot CEO Tom Hunt.

Microsoft executive Adrian Anderson also weighed in with the observation that “the clean energy transition can and should benefit communities across the United States that have been historically excluded from economic opportunity.” Anderson further noted that the collaboration would foster “more inclusive, local economic growth…while addressing the sustainability needs and opportunities within those communities.”

As for specifics, Pivot describes four priorities focused on “overarching community-centric initiatives,” including contractor diversity, local workforce development and diversity, investing in equitable community initiatives with in partnership with the environmental justice foundation Sustain Our Future, and providing increased utility bill savings to low-income subscribers.

The Community Solar Revolution Is Upon Us

ESG or not, the community solar movement has taken on a life of its own. “US cumulative community solar installations are forecasted to break 14 gigawatts direct current (GWdc) in existing state markets by 2028,” the firm Wood Mackenzie stated last February, in a report produced with the Coalition for Community Solar Access (CCSA).

Wood Mackenzie research analyst Caitlin Connelly cites “robust” near-term growth in New York, Illinois and other early-adopter states, with additional opportunities in new markets coming to bear as the maturing markets become saturated.

Those new markets depend on approval from state officials. CCSA is optimistic, though. The organization’s CEO, Jeff Cramer, notes that “more than a dozen” states have enabling legislation in the pipeline to create first-time community solar programs or expand existing ones, with a substantial financial assist from the Inflation Reduction Act and other federal programs.

“I’m increasingly confident that we can leverage the transformational innovation of community solar products and the flexibility of programs to meet a diverse set of grid and policy goals in states across the country,” he said.

In terms of ESG investing, Cramer and Wood Mackenzie both draw attention to the potential for “exponential” growth in the community solar market for low- and middle-income households. Clean power access was once considered a difficult financial leap for LMI households, but the community solar model now provides for a clear financial incentive in the form of lower utility bills.

“The share of community solar capacity serving residential customers is increasing rapidly, highlighting an important shift in focus for the industry,” Wood Mackenzie notes. “The share of community solar serving LMI subscribers has grown from 2% in H2 2022 to 10% in H2 2023, with the cost to subscribe LMI customers declining 30% year-over-year.”

The report also notes that the relatively small scale of community solar projects supports state and federal grid modernization policies aimed at building resilient networks of distributed energy resources rather than concentrating electricity generation in a few oversized central power plants.

The opposition to major solar power projects may still persist, but the generally smaller scale of community solar projects leaves opponents with less room to argue their case.

The agrivoltaics movement is also undermining critics who assert that solar arrays are an inappropriate use of farmland. Agrivoltaics is a relative new field but the US Department of Energy is already tracking hundreds of agrivoltaic projects that provide benefits to farmers and, by extension, their communities (see more agrivoltaic background here).

The one-two punch of agrivoltaics and community solar will be all the more difficult to overcome when the result is a drop in utility costs among other direct benefits to local residents. If you have any thoughts about that, drop us a note in the comment thread.

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Photo (cropped): Microsoft and Pivot Energy have joined forces to pump up to 500 megawatts into the rapidly expanding community solar market (courtesy of Pivot).