CPS Energy has issued a request for proposals for one megawatt (MW) of solar power – small solar potatoes when compared to several projects, ranging in size from 4 MW to 300 MW, under contract with OCI Solar Power. But this new MW will represent the public utility’s first community solar project.
Community solar – slowly gaining wattage in the U.S. and Texas through at least one project in Austin – basically allows customers to benefit from solar kilowatt-hours (kWh) without having to install a single panel at their home. Customers purchase or rent a panel and receive a credit on their bill for solar energy produced. It’s an investment that requires little upfront cost when compared to a private home installation. Community solar also opens up the door for those whose homes physically cannot support panels for a variety of reasons, including structural instability, too much shade, or other factors that affect panel efficiency. Through this model, renters can also begin participating in the solar energy economy.
According to Green Tech Media Senior Editor Stephen Lacey, “No more than 25 percent of U.S. rooftops are suitable for standard solar … a huge pool of renters and low-income customers could be brought into the solar market through emerging smaller-investor models.”
So far, there is no formula for capturing that remaining 75%. Contracts for community solar projects across the U.S are structured in a myriad of ways in terms of construction, funding, and ownership.
“The cool thing about this (RFP) is that we’ve left it pretty open to suggestion,” said CPS Energy spokesperson Tracy Hamilton. “We expect to see proposals that have all different types of (ownership) models.”
Complicating the mass implementation of small-scale and small investor projects is that each utility and each state has its own set of regulations and priorities. This leaves each stand-alone project unique to its local policy environment.
Solar advocacy nonprofit Solar San Antonio (SSA) has been working with CPS Energy and local stakeholders towards bringing community solar for years. At the head of this effort is SSA Executive Director Lanny Sinkin.
“The third-party model is the one that’s caught on the most so far — where (a developer) would sell electricity to CPS (Energy) and the panels to the public,” Sinkin said.
This first MW will act as a kind of pilot program for more, possibly larger, community solar projects. Bring Solar Home, SSA’s simple application program that connects homeowners to local solar installers, has encountered at least 1,000 households that wanted solar but couldn’t pull the trigger, largely because of technical barriers on their rooftops. The market, Sinkin said, exists. Now it’s just a matter of structure.
“The way it will look will partly be determined by the needs of CPS Energy,” Sinkin said. As most rooftop solar is in northern San Antonio, it may need to balance out the grid with projects in other parts of town.
The proposal due date is just weeks away on Oct. 31 – relatively quick for a project of this complexity, Sinkin said – and, as the RFP states, “CPS Energy requires that the entire amount of solar energy capacity specified in the contract be available no later than March 31, 2015.”
A quick turnaround, but “one of the great advantages of solar is you can deploy it very quickly,” Sinkin said.
This community solar RFP is completely separate from the rooftop leasing RFP that will be released later this year, said Hamilton. Under this plan, possibly all the cost of the panels and installation would be shifted from the customer to developers contracted by CPS Energy. The developers would install and maintain solar systems on residential and commercial rooftops. CPS Energy would buy the output of these new systems through a purchase power agreement (PPA) with the developer.
“Solar installer companies have concerns about what the impact of the (rooftop leasing/PPA) will be in their industry,” Sinkin said. “We’re hoping as the program unfolds, that it leads to more contracts for the local solar industry … but in the model, the third-party developer would likely be buying the equipment and then hiring them to install it … (installers would then ) be left with only the labor side — dramatically changing their business model.”
This is one of many reasons SSA favors keeping the $1.60 per watt (AC) rebate program beyond 2015. Keeping the option of private installation open, however, requires finding more money for rebates to keep the payback period on panels attractive enough for homeowners.
“Since 2008, we have awarded roughly $40 million in rebates to customers to reduce the costs of their rooftop solar systems. The result? San Antonio now boasts almost 20 MW of rooftop solar – more than any other city in Texas,” stated CPS Energy Executive Vice President Cris Eugster in a recent Energized blog post. “We believe our new programs will expand solar access even further, and we appreciate the participation of our local solar industry in helping us devise these sustainable, next generation models.”
CPS Energy has more than 130MW of solar power in commercial operation as part of its New Energy Economy initiative, which aims to meet 20% of its electricity demand with renewable energy by 2020. OCI Solar Power is under contract to develop 300 more MW through various projects in the greater San Antonio area.
Correction: This article previously stated that the RFP for the rooftop leasing PPA will come out later this month. After review, CPS Energy has since updated this estimation to later this year.
*Featured/top image: A local installer adjusts panels on a San Antonio rooftop. Photo courtesy of CPS Energy.
Full disclosure: The Arsenal Group LLC, which publishes the Rivard Report, provided consulting services to CPS Energy in 2012. Monika Maeckle, who co-founded the Rivard Report, worked for CPS Energy as director of integrated communications and has now returned to consulting.