SunShare and other Colorado community solar garden builders will bring free solar electricity hookups to thousands more state residents after the Public Utilities Commission rejected a request by Xcel to put off awarding the projects for more study.
Xcel, the largest electric utility in Colorado, had asked the PUC for a “timeout” in awarding bids for 75 megawatts of community solar capacity as part of its overall clean energy plan.
Community solar gardens allow residents who can’t put solar panels on their homes or apartments to participate in clean energy programs by signing up with a developer, who acquires land for a panel array of 5 to 15 megawatts. Those who sign up get an electricity credit on their Xcel bill, and low-income residents can get a full subsidy paid for by a renewable energy fund charged to each utility bill in Colorado.
Xcel had awarded about half the developers’ bids it received for 75 megawatts of low-income gardens for two years, but said the rest appeared too expensive and the low-income subsidies would too quickly drain the renewable energy fund that must last decades. A megawatt serves electricity to about 400 to 1,000 average homes.
Solar builders and community advocates said Xcel was stalling in order to protect its main business, and the PUC in late March rejected the “timeout” idea. Xcel now says it has awarded all the contracts, but declined to comment further.
SunShare has now been awarded a contract to build 12 megawatts in Weld County that will give free electricity shares to up to 1,300 Weld County families, according to CEO David Amster-Olszewski. Utility experts say the new round of low-income awards puts Colorado among the top states in equity-oriented community solar.
“There’s been a push by low-income advocates and the Colorado Energy Office to serve low-income families, and the PUC agreed to that last year, and I think it was a really important signal for them to follow through on that,” Amster-Olszewski said. “To show that those communities are supported in this energy transition.”
SunShare says low-income families will get free energy for 20 years from the project. They will add another community advocacy twist at the Weld County location by having families sign up through schools and commit to using their energy savings to buy healthy food, as part of sustainability education.
Xcel’s summary of the first round of community solar bidding said the projects would take a total of $3.3 million to $7.9 million a year from the subsidy fund. Xcel argued there were other renewable energy projects besides community solar gardens that want to use those funds. Some of the annual revenue is already being spent on rooftop solar and other subsidized power alternatives, Xcel said.
The companies with winning bids for about 37 megawatts of small solar projects were able to move forward while Xcel looked to the PUC for more answers on how to handle the other 38 megawatts of potential energy.
Xcel also builds some of its own smaller community solar projects, though the far greater share of its renewable energy projects are massive wind or solar arrays it builds or contracts through others.
SunShare, one of the earliest and largest builders of community solar projects, had said Xcel’s “pause” gave solar power a bad name by making it sound more expensive than traditional forms of power production.
Now the challenge for SunShare and the other solar project builders is to find panels. Usually one of the biggest hurdles in community solar is negotiating interconnectivity agreements with the local utility, which must accept energy from the garden onto its local grid. This time, Amster-Olszewski said, the biggest problem is a U.S. Commerce Department investigation of foreign panel makers that has frozen the market for the panels, or “modules.”
The investigators will issue preliminary findings in August, and if they agree that manufacturers in countries like Thailand and Vietnam have been illegally avoiding steep tariffs imposed on China, retroactive tariffs of up to 250% could hit anyone buying and installing solar arrays.
SunShare and other developers said they are pushing some project launches into 2023 or beyond until they get certainty on how they can acquire enough panels, and at what price.
“I think it’s a backwards way if you want to incentivize U.S. manufacturing,” Amster-Olszewski said of one U.S. panel maker’s call for the federal probe. “You shouldn’t slow down the Green Revolution.”