Aside from environmental and social benefits, consumers want affordability. And that’s where the CEC model shines. The solar garden “has a very low entry cost for ownership,” says Spencer. “Our members leverage their collective purchasing power and buy as little or as much energy equipment as they choose at reduced prices.” Economies of scale give the CEC excellent cost per watt.
At the El Jebel site, the gross consumer cost, including installation, was about $466,000 ($6 per W). After rebates and incentives, the 19 members paid an average of $3.15 per W. Some members bought only one module, while others purchased up to 87, with the restriction that an individual’s modules could not produce more than 120% of their household electricity consumption. The buy-in was a 30% refundable deposit. The remaining 70% of the net cost was paid after the facility was completed. The CEC is working on consumer financing solutions for future projects.
Each month, Holy Cross Energy credits the members’ utility bills at $0.11 per kWh (a premium over HCE’s conventional $0.08 retail rate). Credits are calculated based on the number of modules owned and the amount of energy produced by the facility each month. If utility rates increase, the credit for the CEC-generated kWh will continue to be 37% above those future rates.
So far, it’s been a relatively easy sell. With the CEC model, customers reap the same federal tax benefits of PV ownership at home (currently a 30% credit), without having systems installed at their residences. Because it’s a managed, reliable system with power coming from one source, customers also get better electricity rates. Through the Power Purchase Agreement (PPA), the utility pays a higher rate to community solar members than it does to home-sited PV customers ($0.11 per watt versus $0.08 per watt).
“I love the fact that we can own a solar power [system] that will be maintained, up-to-date and hassle-free,” says Katie Ertl, one of the first members of the Mid Valley array. “It lets us pay attention to the environment and use green energy, with the experts supporting us along the way.”
Plus, there’s another attribute: “Many people can buy renewable energy [through utility companies’ green energy programs], but that energy is usually sourced from far away or traded, and the customer doesn’t own the energy source. This is like buying the cow, not the milk,” says Spencer. “This is based where you live, improving the air quality and economy locally. And when milk goes to $5 a gallon, you’ll be glad you own a cow that produces your milk for free.”
And that resonates well with locals around the outdoor meccas of Aspen and Vail. “We’ve been trying to reduce our fossil-fuel consumption for years, but when it came to making the switch to solar, there were some issues we couldn’t overcome,” adds Aspen resident Chris Davenport. “The first was price; the second was our roofline. Now, we can own the renewable energy we want and at a fraction of the cost. And the energy is generated in our own valley.”
Support from the local governments is vital. In November, Eagle County commissioners modified its ECO-Build Rebate program to allow “off-site” PV customers to apply for the same incentives as individual customers. The decision lets residents who invest in community arrays enjoy the same rebates as homeowners—reflecting the county’s commitment to encourage all residents to invest in solar electricity. “The Eagle County decision is a big step forward for community-owned PV owners being treated the same as homeowners with individual rooftop systems,” says Spencer. “Many counties and states are following suit.”
The CEC’s program is good news for RE in Colorado, and the company hopes to expand even further. From the onset, it focused on ensuring the model could be replicated and exported, and those efforts are paying off.
The CEC is currently in conversations with more than three dozen potential licensees interested in exporting the model across the country. The company is working on a joint venture with two other partners—a finance company and a multi-billion-dollar solar integrator—to deploy the model in 10 key solar states, including Florida, Texas, and California.
“We’re even getting inquiries from businesses in other countries that want to franchise what we’re doing,” says Spencer, adding that he’s also in discussions with other Colorado utilities that are assessing how the model fits into their clean energy strategies. “We’ve proved the concept locally and now want to take that blueprint to branch out elsewhere.”
By the end of 2011, Spencer estimates the CEC’s community-owned arrays will provide 5 to 10 MW of capacity in and outside their local area, with that number eclipsing 100 MW nationally by 2015. “It could go from there to gigawatts very quickly. In my dream world, [the program] is a catalyst that creates a quantum leap in the adoption of clean energy.”
A former reporter for the Denver Business Journal, Eugene Buchanan has written about the environment and outdoors for more than 25 years, with his works appearing in Outside, Men’s Journal, National Geographic Adventure, and Sierra magazines, and ESPN. While community PV options don’t exist yet in his home in Steamboat Springs, Colorado, he’s looking forward to their arrival.