Post on 17-Jun-2020
Community Solar Overview and Market
ProjectionsJennifer Szaro, Senior Director
SEPA
About SEPA
SEPA’s mission is to facilitate the utility industry’s smart transition to a clean energy future through education,
research, and collaboration.
www.sepapower.org
Growth of Community Solar Programs
www.sepapower.org
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pre2011 2011 2012 2013 2014 2015 2016 2017 (May)
Cumulative CS Capacity Cumulative Number of CS Programs
Source: SEPA Annual Member Survey
There are 67 Planned CS Programs that will account for an additional 313 MWs
Status of Community Solar Programs
Utility-Managed Community Solar Programs
Third-party Managed Community Solar Programs
www.sepapower.org
Currently implemented
No interest
Planning/researching/considering
Currently implemented
No interest
Planning/researching/considering
Source: SEPA Member Survey
www.sepapower.org
Untapped Market Today
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Source: SEPA Analysis
Rooftop
Solar
Community Solar
Utility-Scale
Solar
Cumulative
Installed US
Capacity (2014 MW)
• Median program is 102.5 kW
• 75% of programs leverage systems less than 800 kW
• Largest programs are around 20 MW (TEP, SRP, Xcel, RMP)
Understanding Customer Perspectives on Community Solar
Jennifer Szaro
Senior Director, SEPA
www.sepapower.org
Methodology
Sample of 2,001 regionally
diverse U.S. residential utility customers from a national online consumer panel
A mix of multiple choice, fixed
response, Likert scale and
discrete choice (conjoint) analysis
questions
Stratified random sample
included a mix of genders, ages,
home ownership,
ethnicities/races, education,
incomes and geography
Margin of error +/-2.2% at a 95% confidence level
Source: 2016 SEPA-Shelton Group Survey
The Current Residential Solar Landscape
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Consideration by Type
ConsiderationInterest
59% are interested in getting solar power for their
home
34% are seriously considering
renewable energy options
16% are currently considering rooftop
solar
14% are currently considering
community solar
But DO customers UNDERSTAND community
solar?
14% 47%Current
consideration
Interest after education
Residential Community Solar
Landscape
19% 52%Current
consideration
Interest after education
Commercial Community Solar Landscape
How Do Customers Respond to Different Program Designs?
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Residential Customer Research
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Panel lease
• Pay up front fee to lease a certain number of panels
• Receive bill credit per panel per year based on production of the panel
• Time-certain contract
Solar lease target • Younger, affluent couples (25-54)
• Suburban
• White collar
• More likely to live in the NE
Care about:
• Saving money
• The environment
• Being good role models for their kids
• Time management
Why a Community Solar lease?
• Like having an ownership stake
• In-community location is more important to them
• Worried about inconsistent production of a rooftop system
Low-end market potential for panel lease model, or roughly 2.5% of households
2,800,000
Messaging
Community solar is good for the planet!
• Promote environmental benefits, including curbing climate change.
Take your kids to see your solar array!
• Talk about future generations/being a good role model.
Solar without the hassle!
• Note key community solar strengths: lower risk of inconsistent output or maintenance headaches.
An Effective Lease Design
20+ year term
$595+ per panel
No on-bill financing
Less ownership – customer doesn’t “own” the panels or power the panels produce
Location based on efficiency/lowest cost to utility (often distant)
Most capacity currently generated by non-utility-owned arrays.
Often no real-time access to production information
5-10 year term
$395/panel
On bill financing
Customer “owns” the power the panels produce (and even better) “owns” the panels
Location in the community or within 15 minutes driving
Utility sponsor or solar co./utility partnership
Real-time panel production info via web portal or smartphone app.
High Probability of SuccessLow Probability of Success
Block Subscription Offering
• Subscribe to blocks of power produced by a solar array at a slight price premium per kWh ($.01-.03)
• That rate is locked in for the duration of the contract, even if the utility’s rates go up
Low-end market potential for block subscription rate model, or roughly 3% of
households
3,700,000
Block Subscription Target • Females, 45+
• Suburban
• Well educated and middle class
• No kids at home
• More likely to live in the South
Care about:
• The environment
• Locking in lower energy costs
• Being responsible
Why a Community Solar Subscription?• Haven’t really thought much about solar
before• Utility sponsorship is more important to
them• Adverse to ongoing maintenance required
for a rooftop system
Messaging
Community solar is good for the planet!
• Though they haven’t considered solar viable for themselves, they’re concerned re climate change
Community solar is affordable!
• Point to the economic benefit of locking in what will likely be a lower-than-average rate over a long term.
You can be part of the solution!
• Help them feel empowered
An Effective Subscription Design
2 year term w/option to renew
$100 non-refundable deposit or “sign-up fee”
$.03-$.05 premium kWh rate
Most capacity currently generated by non-utility-owned arrays.
Location based on efficiency/lowest cost to utility (often distant)
No real-time access to production information
20+ year term
No sign-up fee or $50 refundable deposit (after 2-5 year participation)
$.01-$.02 premium kWh rate
Utility sponsor or solar co./utility partnership
Location within community
Real-time panel production info via web portal or smartphone app
High Probability of SuccessLow Probability of Success
Overall, the best package from a customer perspective:• “Community Shared Solar” = best description
• If leasing:• Shorter (5-10 year) terms; < $495/panel
• If subscribing :• Longer (up to 20 year) subscription rate term is OK; premium kWh
subscription rate won’t fly above $.01/kWh
• No sign-up fee
• Non-refundable deposits don’t fly
• Utility involvement in community solar projects preferred
• Siting in their community or within a 15 minute driving distance preferred
• Need access to panel power production info.
www.sepapower.org
Community Solar Program Participant Feedback Survey
Education is Critical Program Demographics
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Subscribers who felt program was clearly explained
Subscribers who felt program was
not clearly explained
Own , 98%
Rent, 2%
18-34, 4%
35-54, 21%
55-64, 27%
65+, 48%
< $25k, 2% $25k–$49k, 15%
$50k–$99k, 45%
$100k+, 37%
Single w/ kids, 7%
Single w/o kids, 26%
Partnered w/o kids, 32%
Partnered w/ kids, 36%
Inner Circle is Community Solar Subscribers
Outer Circle is NationalPopulation
Key takeaways
Build your CS arrays within a 15 minute drive of most likely subscribers
Offer a robust portfolio of options – different customer segments need different solutions
Rethink price points and terms, using the guidance noted here to craft the offers with the highest likelihood of success.
Education is key to community solar recruitment
Consider the customer journey when designing a program – are you making it easy or difficult?
Commercial Customer Research
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Low-end market potential for panel lease model, or roughly 4% of American
businesses
308,000
• Younger executives (CEO/CFO/COO; 18-44 years old)
• Small to mid-size companies (revenue less than $10 million – majority have fewer than 10 employees)
• Own their building and operate in a single location
• More likely than average to be located in the Midwest
• More likely than average to be in business services.
Cares about:
• Being a good corporate citizen
• Reducing energy costs
Why a Community Solar lease?• Less risk and better monthly cost benefits
• Likes the idea of sponsorship by a reputable solar company, working in partnership with the utility
Panel Lease Target
Messaging
Be a good corporate citizen!
• They feel a strong sense of responsibility and report already undertaking at least 5 sustainability initiatives
Community solar is good for the bottom line!
• If they can’t make the economic case for it they won’t do it. They’re also not willing to pay extra for visibility of the panels
Low-end market potential for subscription rate model, or roughly 2% of American
businesses
132,000
• Older owners/partners(at least 45 years old)
• Small companies (1-9 employees; revenue less than $5 million)
• Lease their buildings
• Located in the Midwest or Northeast
• More likely than average to be in business services, manufacturing or technology.
Cares about:
• Reducing energy costs
• Control and independence from their electric utility
Why a Community Solar lease?
• No maintenance costs
• Sponsorship by local utility
Block Subscription Target
Messaging
Get control over your energy costs!
• The bottom line is their top driver…and they are control-oriented
All the advantages of solar without messing with your rooftop!
• They’re wary of the impact of rooftop solar on their property values and resale value. And many don’t own their buildings
Be recognized for your contribution
• This target does want the array to be local and visible…and they want credit for their participation
Businesses are participating in/considering a wide variety of renewable options
• 8% say they’re buying RECS and 23% are currently considering them.
• 7% have some other renewable generation solution (e.g., geothermal) and 20% are considering them.
• 6% are participating in a green power plan and 20% are considering one.
• And many (18%) participate in more than one option and 42% are currently considering more than one option.
RECOMMENDATION:
Offer a diverse portfolio of renewable energy options.
The market for business community solar is significant, but smaller than rooftop/onsite.
• 27% are currently considering rooftop/onsite.
• After exposure to rooftop cost and lease/financing examples and community solar models, interest in rooftop increased.
• Given a final choice, most (50%) will be more likely to consider rooftop (either leased, purchase, or financed), compared to 39% who will be more likely to chose a community solar option.
RECOMMENDATION
Unlike consumers, community solar isn’t seen as an acceptable alternative to those who are interested in their own system, but CS does offer a viable option to a different market – particularly smaller companies and those who lease, rather than own, their facilities. So offer both alternatives.
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Is Your Program Contagious?
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More Community Solar Resources
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1. Select a community solar program design from your table.
2. Take 7 minutes to map out the customer’s journey to participate in the program.
3. Each table will report out what they learned about the customer’s experience.
1. How long was the process?
2. Were there any potential hurdles? If so, what could be done to address them?
Table Exercise
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