Not all shared renewable energy programs are created equal. Indeed, states like Minnesota and New York have commendable programs, while California and Connecticut get low grades, according to the Interstate Renewable Energy Council’s (IREC) 2018 scorecard.
The nonprofit defines such programs as those that enable multiple customers to share the economic benefits of one renewable energy system via their individual utility bills, typically through bill credits. IREC’s National Shared Renewables Scorecard does not capture voluntary, utility-level programs or “community” renewables programs, such as green tariff shared renewables, group purchasing or aggregate net metering programs.
Programs are scored along these main categories: program timeframe, aggregate capacity limit, tracking and reporting requirements, and whether and how the program addresses low- to moderate-income consumer participation.
Minnesota’s Solar Rewards Community Program received an “A” because it incorporates the majority of shared renewables best practices, IREC said. Launched in 2014, the program allows multiple customers to participate in a common solar-distributed generation system, applicable to the investor-owned utility Xcel Energy. Among other attributes, Minnesota’s program promotes access to low-income residents of the Railroad Island neighborhood in Saint Paul, through its Rehabilitation and Efficiency: Neighborhood Energy Works three-year pilot program.
IREC recommendations for the program include increasing the system size limit from 1 megawatt (MW) to at least 5 MW and enabling the facility and customers to be located anywhere within the utility service territory, among other suggestions.
New York’s Community Distributed Generation program, which received an “A–,” allows multiple customers to participate in a common distributed generation system, applicable to all investor-owned utilities.
Among other attributes, New York’s program compensates shared renewable energy generation at the “Value Stack” tariff, which includes values for energy, capacity, environmental benefits and demand reduction. In addition, projects receive a “Market Transition Credit” that brings the bill credit rate to a value that is at or near the retail rate.
Opportunities for improvement include explicitly permitting customers to keep their subscriptions if they move within the same utility’s service territory, as the current rules do not address portability.
At the other end of the scorecard’s spectrum are programs in California and Connecticut.
The Golden State’s Enhanced Community Renewables Program, applicable to Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison, received a “D” because it “does not comport with many of the IREC-identified best practices, which could impede program effectiveness and market development,” IREC said.
The nonprofit’s recommendations for the program include improving the value proposition for customers by increasing the bill credit rate—under the current program, customers only receive bill credits based on the class average generation rate.
However, another California program, Virtual Net Metering, received a “B–.” Launched in 2011, the Virtual Net Metering program allows multitenant and multimeter customers to participate in a common distributed generation system, also applicable to Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison. The program received a better grade because, while there is room for improvement, it “reflects many best practices critical for shared renewable energy development.”
IREC’s recommendations for improvement include allowing the facility and customers to be located anywhere within the utility service territory, as under the current program, the facility and subscribers must be located on the same multitenant or multimeter property.
Connecticut’s Virtual Net Metering program received a “C–.” The Constitution State’s program allows state, municipal or agricultural customers of investor-owned utilities to participate in a common distributed-generation system. While the program compensates shared renewable energy generation at a rate that includes values for generation and a portion of the transmission and distribution rate components, IREC said the program “lacks many of the key components necessary for successful market development.”
Opportunities for improvement include increasing access for low- to moderate-income customer participation by incorporating components related to financing, marketing, education or outreach, among other suggestions.
The state’s Shared Clean Energy Facility Pilot Program received a “D–,” the lowest grade on IREC’s scorecard. Authorized by legislation in 2015, the Shared Clean Energy Facility Pilot Program is a two-year pilot program aimed to support the development of common distributed-generation systems, applicable to all investor-owned utilities.
While the program values shared renewable energy generation at a rate close to the utility’s retail rate through a competitive bid process, the program lacks many of the IREC-identified best practices, the nonprofit said.
Opportunities for improvement include explicitly permitting customers to keep their subscriptions if they move within the same utility’s service territory and to transfer their subscriptions to other customers or back to the subscription organization. The current rules address neither portability nor transferability.
The scorecard aims to “help stakeholders think through program design,” Mari Hernandez, IREC'’s regulatory manager told Utility Dive via email.
“As more states add programs or reassess existing ones, the scorecard highlights that there are replicable models that policymakers and stakeholders can draw from to set their state up for program success,” Hernandez wrote.