Unlocking the value of community solar
Utilities find opportunity in the inevitable growth of distributed energy
Strong demand for solar by consumers in addition to program design innovation will likely propel the growth of the US shared solar market for years to come.
A growing market for shared solar
US electric utilities of all types are defining their own paths forward to bring solar to their customers. Community, or “shared,” solar programs are an increasingly popular option. These programs allow customers who do not own their homes, possess strong credit scores, or have adequate roof space to buy solar power, or in some cases, to invest in solar assets.
This report from the Deloitte Center for Energy Solutions analyzes the community solar market from a fresh angle, examining the unique opportunities and challenges posed to each utility type: cooperatives, municipal, and investor-owned utilities. Download the report to discover how growth trends vary by utility type and why state policies are a key factor in enabling and driving community solar market growth.
State policies enable and drive community solar growth
Shared solar has gained a foothold in the US market during the past five years and its growth shows no signs of slowing. In 2010, only two shared solar projects existed. Today 77 utilities administer 111 projects across 26 states, accounting for a combined capacity of about 106 megawatts.
What is driving the growth? To overly simplify a very complex matter, there are two overarching factors that generally shape utility community solar adoption:
- Regulation and market drivers affecting the utilities’ territory
- Whether the utility is investor-owned, municipally-owned, or cooperatively-owned
The interactive map below illustrates the impact various types of policies have had on community solar market growth, including shared solar policy, metering policies, deregulation, and renewable portfolio standards.
Community solar project capacity (kW)
Shared solar mandates and pilot programs
Shared solar program mandate: State law mandates that certain utilities administer shared renewables programs. Details of administration vary by state. Each of these laws has propelled, or is on the verge of propelling, shared solar growth in that state.
Pilot shared solar program: State law mandates that certain utilities work with state agencies to develop pilot community solar programs.
Proposed legislation: Legislation has been introduced to encourage or mandate the development of community solar programs.
Virtual net metering (VNM): Net metering is a common distributed renewable energy policy in the United States, allowing individuals to “turn back” their meter by generating on-site electricity. Virtual net metering allows the electricity output from a single power project to be shared with several end-users, typically in proportion to their ownership of or subscription to the shared system.
VNM (all customers): All utility customers are eligible to participate in virtual net metering.
VNM (limited): Eligibility is limited by technology, utility type, or customer classification.
VNM (utility choice to offer): Utilities are allowed to offer virtual net metering, but are not obligated to.
On-bill crediting: State law mandates that certain utilities credit an owner’s or subscriber’s electric bill for the amount of electricity generated by a community solar project.
Deregulated: Generation and distribution assets are unbundled; electricity providers compete to sell electricity directly to consumers, also known as "retail choice."
Regulated: Utilities are vertically integrated and customers are not allowed "retail choice."
Suspended: Restructuring activities are currently suspended.
Renewable portfolio standards:
Renewable portfolio standard: A regulatory mandate to increase production of energy from renewable sources such as wind, solar, biomass, and other alternatives to fossil and nuclear electric generation.
Voluntary target: Utilities are encouraged, but not required, to meet renewable procurement goal.