Helping Utilities Turn Green Energy Into Greenbacks
Community generation, renewable energy systems owned and shared by groups of individuals in a local community who are unable to deploy their own individual systems, is an emerging clean-energy solution that is starting to gain real traction among utilities, energy users and at all levels of government in the United States.
Community generation laws and programs already exist in 13 states, with more states considering implementing them, according to a recent report by the Interstate Renewable Energy Council (IREC). In addition, US Senator Mark Udall from Colorado recently introduced the Solar Uniting Neighborhoods (SUN) Act of 2010, which would extend the federal tax credit to people who invest in a community generation project because they are unable to deploy solar energy on their own property because of orientation, shading, ownership or other issues.
Utilities are embracing community generation as good PR and good for the bottom line. Communities pay for these facilities to offset their load, but often it is the utility that banks the Renewable Energy Credits (RECs). These RECs are used by the utility to “green” their “brown” power and meet emerging renewable portfolio standards (RPS) goals. In addition, community generation is usually placed within a municipality, often increasing transmission capacity – a priceless commodity in many parts of the U.S. – and provides more time to build out glacial-paced transmission projects.
Community Generation Fills Unmet Demand
Community generation addresses the market segment that would like to use renewable energy, but can’t. Examples include property owners with poor solar or wind resources due to wind obstructions, shading or north-facing roofs, renters and tenants, or those with structurally weak homes that can’t support a roof of solar panels.
The utility allows these owners to buy into in a community generation project, and the energy generated by that project is then apportioned among the various owner-customers to offset their utility bill. This approach is very similar to traditional net-metering programs in place around the U.S., with the exception that the solar panels are not located behind the customer meter but are instead a portion of a larger community renewable energy system.