Buying Into Solar Power, No Roof Access Needed
By DIANE CARDWELLJUNE 19, 2014

Like many consumers, David Polstein had already done much to reduce energy use in his large Victorian home in Newton, Mass. He replaced his appliances with energy-efficient models, installed better heating and put in new insulation. But he was unable to get a solar system to reduce his utility bill, he said, because his roof is too small and shady to make it worthwhile.

Now, that could be changing. Mr. Polstein is considering joining a so-called community solar garden that is under development in his part of the state, one of many similar new arrangements now available in Massachusetts. Through the approach — largely pioneered in Colorado and spreading across the country — customers buy into a solar array constructed elsewhere and receive credit on their electricity bills for the power their panels produce.

For developers, such shared or community solar arrays create a new market from the estimated 85 percent of residential customers who can neither own nor lease systems because their roofs are physically unsuitable for solar or because they do not control them — like renters and people living in large apartment buildings. And for those customers, it offers a way into the solar boom, whether they seek to contribute to the spread of clean energy or to reap the potential cost savings.

“I pretty much realize that if I’m going to do this sort of thing,” Mr. Polstein, a violin maker, said, “this is the only way I’m going to be able to do it.”

Massachusetts passed its law enabling community renewable energy projects in 2008 and saw at least one town solar garden begin operating in Brewster in 2012. Now, Clean Energy Collective, a leading developer, is building systems that are due to start producing power in Massachusetts by the end of this month. The company has teamed with Next Step Living of Boston, a home energy-efficiency company, which is selling the product to consumers across Massachusetts.

Several other places, including California, Minnesota and Washington, D.C., have laws to establish their programs, while others have proposals at some stage of drafting. In New York, for instance, a bill is working its way through the State Legislature.

“There’s no ability to really put solar on your roof when you live in an apartment — you just don’t own the roof,” said Amy Paulin, an assemblywoman representing Westchester.

Ms. Paulin, who is chairwoman of the Energy Committee, co-sponsored the bill after learning of the concept from advocates including Vote Solar, a group that promotes solar energy. Encouraging the development of modest solar installations throughout the state would also put less stress on the transmission and distribution grid, she said.

The shared approach has its roots in rural electric cooperatives, said Elaine Ulrich of the Department of Energy’s SunShot program, but has only begun to take off in recent years, and still accounts for a tiny fraction of solar production. There are at least 52 projects in at least 17 states, and at least 10 states are encouraging their development through policy and programs, according to the Solar Energy Industries Association, the main trade group.

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It is among the profusion of financing mechanisms meant to encourage the development of solar energy, from residential leasing programs to crowdfunding.

The combination of plummeting prices for solar equipment and installation and generous federal and state incentives has widened their appeal. The Energy Department is encouraging their spread, publishing a guide to best practices in 2010, and is weighing proposals to award $15 million in grants to help design community projects.

In general, a developer builds a solar farm that can range from a few dozen panels on a rooftop to thousands sitting on more than 100 acres, and sells the electrical output of a set number of panels to each customer, depending on how much of their power use they want or can afford to offset. Customers then receive a credit for that power, often at a fixed rate per kilowatt-hour, that is then deducted from the energy portion of their electric bills.

Costs typically run $500 to $1,400 for a panel, said Paul Spencer, president of Clean Energy Collective, adding that customers benefit from the fact that the arrays can be situated in optimal locations to maximize energy production. But those costs can run higher in some markets, and customers must generally live within certain geographic or utility service boundaries.

The details vary from state to state, and can be complicated by how utilities charge customers. In Colorado, for instance, Xcel Energy customers continue to pay the standard nonenergy fees, but can buy enough solar shares to offset 120 percent of their load.

“I’ve been seeing a lot of zero bills,” said Brendan Miller, a civil engineer who said he paid about $10,000 for 11 panels to cover most of his electricity needs in his Denver condominium.

Interested in solar energy since high school, Mr. Miller had purchased a system for his previous home in Arizona and said the community solar arrangement was much simpler because he did not have to navigate the tax credits or installation himself.

“It was more of a financial transaction than a contractor-construction transaction,” he said.

In New York, the proposed system would allow customers to offset no more than 100 percent of their electric use and would limit their initial ownership period to five years for residential consumers and 10 years for businesses, with an option for renewal.

For customers, the systems offer flexibility, proponents say, because their interest in the panels is transferable so they can take the output with them if they move or turn it over to someone else. The community solar garden differs from another common way consumers can remotely buy green energy — energy service companies — because people like Mr. Miller buy into the array itself.

Still, they can carry high upfront costs depending on the size. For Mr. Polstein’s roughly 3,000-square-foot house in Newton, for instance, it would cost about $41,000 — after anticipated rebates and incentives — to buy 32 panels in the coming Massachusetts array. He likes the idea of contributing to the growth of solar, but worries that he may end up, as an early adopter, paying more than he should.

“It may not be the smartest investment if you’re only doing it from the point of view of money,” he said. “But if you factor in the idea that you’re trying to make a change in how the energy you use is produced and the effect it has on the world, then you can sort of rationalize it a little better even if five years from now you could do the same thing and it would cost a little less.”