Today was a pretty exciting day – we energized the 2.5MW solar garden that I’ve spent the last ten weeks working on here in Colorado Springs. The system is now tied into the grid, producing clean, renewable energy for the local utility. It’s been an interesting experience, and running a construction job during the wettest spring in the area since records began has been a pretty significant challenge, but one of the things I really enjoy about this job is that one way or another, things get done… Even if there are some major struggles along the way.
One of the more interesting aspects of this project is the financial side. The owner of the farm will be NRG – the USA’s largest retailer of green electricity – but a lot of the development work and the financing came from a separate company called Sunshare, which is a really innovative company who specialize in ‘community solar’.
Community solar is a relatively new initiative built around a couple of core principles. Firstly, not everyone who is interested in utilizing solar energy for their electricity use can actually get access – you may not own your home, you may live in an apartment block, or perhaps you do own a house but your roof is inappropriate for a solar system, and you have no space for a ground mount set up. A 2008 study by the National Renewable Energy Laboratory found that only 22-27% of residential rooftop area in the United States is suitable for hosting an on-site photovoltaic system after adjusting for structural, shading, or ownership issues. This simple fact leaves a huge proportion of the population with a lack of options if they’re interested in purchasing green energy.
The second important principle supporting community solar is that it’s significantly cheaper and more efficient on the economical side to build a large scale system with thousands of panels in an empty field, than it is to install hundreds of individual systems on households throughout a city.
This is where a company like Sunshare steps in. Small businesses, schools, churches and homeowners alike are engaged, and provide the capital for a ‘solar garden’. This money, from a range of different sources, is then bundled together into a financial package which is used to develop and construct the large scale solar farm like the one we’ve just completed.
Once the solar garden is installed, it’s then taken over by an electricity retailer such as NRG. From their side, they have an agreement with the local utility called a power purchase agreement, or PPA – which is a contract that stipulates that the energy generated at the facility will be purchased by the utility at the agreed upon rates for a period of time (generally 20-25 years.)
Then, once the system is up and running and producing power into the electricity grid, the various customers who provided the initial capital for the job then begin to get their financial return – in the form of credits off their monthly bills. The amount of money that they save each month is dependent on both the performance of the system, and how much capital they initially fronted.
This set up is proving extremely successful throughout the US, and there are now 24 states with at least one community solar project on-line. An additional 20 states either already have, or are in the process of enacting community solar legislation. A recent Greentech Media Research report predicted 500MW of annual installations in the US by the year 2020 – a remarkable growth rate considering there is only 66MW of cumulative capacity installed via this mechanism today.
The positivity and buzz around the renewables industry here in the US right now is pretty incredible to be a part of, and the upbeat mood is well justified – another report I came across is predicting that there will be 135 gigawatts (GW) of solar being installed per year throughout the world by 2020, a number that is only expected to grow. This is a pretty incredible prediction, especially since there isn’t even 135GW of installed capacity to date, and solar technology has been around for over 40 years. An interesting note in regards to this growth is the fact that although the solar industry still has subsidies and tax credits and various other incentives in place (as all our major energy sources do), it’s getting to a stage now that even without these, it’s economically viable and even cheaper than many non-renewable sources.
A huge factor in this has been the clever, innovative business strategies that companies like SunEdison, Solarcity and Sunshare have come up with to help expand the market and push the industry forward.
I love this – on so many levels – and I think it’s fantastic that these companies are helping to provide access to clean energy to a wider range of people, how they provide high paying, safe and skilled work for people throughout the country and that the systems they install obviously have a positive impact on the environment and assist in moving us to a low carbon economy.
I’ll sign off with that – on a personal note, I’ve got another two-three weeks finishing out the second phase of this project (a 500kW system on the same site, but on a different schedule), before heading either back to California for a similar sized gig, or potentially out to the east coast for a larger install near DC. Interesting times ahead.