How to grow a solar energy garden

By Elisa Wood

June 21, 2012

Getting energy from the sun is a great idea. However, installing solar panels house-by-house is slow, costly and cumbersome, and downright inefficient if the goal is to bring solar to the masses.

This problem troubled Paul Spencer after he built his own uber-efficient, custom solar home near Aspen, Colorado in 2004.  The engineer and serial entrepreneur wondered how he could replicate his home many times over across the United States.

Out of this problem came the community-owned solar garden – or at least a version pioneered by the Clean Energy Collective, a Colorado company founded by Spencer in 2009. What is a solar garden? Think community vegetable garden, where everyone in the neighborhood tends a common plot and then shares the harvest. Except here the crop is solar energy, often produced by ground-mounted photovoltaic panels on an open piece of land or large rooftop.

Variations on the solar garden idea are catching on in California, Colorado, Massachusetts, New Mexico and other states.

Some models rely on virtual net metering – where utility customers  receive retail power credits as though their solar panels were on their home or business.  However, only a small number of states allow virtual net metering.

In another variation, the utility owns the solar panels and customers who decide to join the garden pay a premium on their bill in return for membership.

Neither of these models offer a good way to grow residential solar quickly across the country, says Spencer. Convincing lawmakers to adopt virtual net metering takes too much time and is often controversial. And under the utility-ownership model, customers don’t receive direct financial benefits from the solar panels.

His company has developed solar gardens in New Mexico and Colorado that avoid these problems. CEC’s approach foregoes virtual net metering, but allows customers to own solar panels with a good payback.

It works like this. CEC develops the solar facility and invites community members to join in the ownership, which starts at about $500-$800 per panel. 

CEC sells the power from the facility to the local utility under a solar power purchase agreement, a model that attracts third-party investors because it creates certain tax benefits.  A management entity, akin to a homeowners association, maintains the garden with set aside escrow monies, which is expected to produce power for 40-50 years, Spencer says.

The community garden approach gives members a chance to lower their electricity costs – they  receive monthly bill credits for the energy produced by the panels. When members move, or just no longer want to participate, they can sell their panels. 

This approach makes solar available to households who would otherwise be ineligible – and there are many. About 80 percent of metered utility customers in the United States cannot install rooftop solar for various reasons, according to Spencer. Their roofs are too shady or they live in apartments.

CEC’s model also helps remove utility resistance toward solar gardens, according to Spencer.  A proprietary remote meter system, developed by the company, tracks the solar garden’s energy production and directly credits members’ utility bills. This removes a headache for utilities that sometimes resist the idea of solar gardens because of the tracking and crediting burden placed upon them. CEC also partners with utilities to establish fair solar power pricing for both the utility and its customers. 

Will this model work? So far the company has seven facilities built or in development, with a typical capacity of one-half to one MW each. Now in talks with several utilities nationwide, CEC expects to build 5 to 10 MW of capacity this year, and six to seven times that amount in 2013.

“It is easily conceivable that community solar can contribute hundreds of megawatts of new capacity to the grid per year,” Spencer says.

Hundreds of megawatts may not sound like a lot in a country where one nuclear plant in California produces nearly 4,000 MW. But, all of the photovoltaic solar in America amounts to only about 4,400 MW. Most of that comes from large utility-scale plants. The US solar residential market added only 94 MW in the first quarter of 2012, according to the Solar Energy Industries Association.

Is the solar garden the secret to bringing efficiency and scale to residential solar?  The idea has been planted. Let’s see if it takes.

Elisa Wood is a long-time energy writer and co-publisher of Energy Efficiency Markets newsletter. 

How efficiency makes solar affordable

By Reid Smith

October 27, 2010

When solar energy companies think about how to reduce the cost of their product, typically a lot of time and money goes toward increasing the efficiency of solar panels and their manufacturing process. Reducing the production cost decreases the final cost the consumer will have to pay.

However, few solar companies start by making the building more energy-efficient, even though this effort can significantly drop consumer costs. Energy efficiency lowers the demand for energy in a building. If a building needs less energy, it requires fewer solar panels, which drives down the cost of the installation for the building owner.

But you may be wondering, how significant are the energy savings in a building after energy efficiency upgrades?

Buildings are large energy consumers, accounting for 40 percent of US energy consumption, according to the US Department of Energy. Homes make up 22 percent.

Not only are buildings big energy users, but they are also big energy wasters. In fact, 40% of the energy we use in buildings is wasted due to poor insulation and air leaks.

So the first thing to do is improve the building envelope. After that, it’s important to consider how solar energy will be used in the building and what kind of installation is most efficient. People tend toward solar photovoltaic panels because PV has become the image of solar energy, said Rick Reed, president of Solaray Corporation, at the Solar Power International conference in Los Angeles earlier this month.

But solar PV is typically only about 20 percent efficient, whereas solar thermal is about 90 percent efficient. “Many people are heating their water from solar PV instead of using solar hot water systems,” he said. “This doesn’t make any sense.”

Solar thermal systems use much simpler, reliable technology and are much cheaper to install than PV systems. Still, they are largely an after-thought in the US.

For consumers, the cost of solar thermal and energy efficiency upgrades are typically much less than solar PV installations. However, most consumers interested in upgrading their homes to solar do not realize how much energy their houses could save before installing solar PV. And historically their solar installers have not told them either. Why would a solar PV installer want to promote energy efficiency if it would translate to selling fewer panels?

Thankfully, that’s changing, partly because new financing options focus on reducing the overall cost of solar for the consumer, rather than on simply selling them solar panels. As a result, more solar companies are beginning to move into the energy efficiency business. SolarCity is one example of a company that now combines energy efficiency services with solar installation.

This has huge implications. Retrofitting 40 percent of the residential and commercial building stock in the US would create over 625,000 full-time jobs over a decade, spark $500 billion in new investments, and generate as much as $64 billion a year in cost savings for ratepayers, according to a September report by The Center for American Progress.

So if you have been scared away by daunting up-front costs of solar, now may be the perfect time to get a home energy audit and begin discussing solar financing options available in your area. You may be surprised what you find.

To read the full report by The Center for American Progress, Efficiency Works:Creating Good Jobs and New Markets Through Energy Efficiency, go to http://www.americanprogress.org/issues/2010/08/pdf/good_jobs_new_markets.pdf

Reid Smith is the editor of Energy Efficiency Markets.

Energy Efficiency and PV: Together Forever

By Elisa Wood

We have seen a marriage of the energy efficiency and solar energy industries as the US has worked to green its buildings. In fact, some financing programs require that all cost-effective efficiency be pursued before solar panels are installed.

Here Elisa Wood interviews Liz Merry, owner of Verve Solar Consulting, about how the solar industry views energy efficiency and the outlook for companies that tackle both EE and PV.

What do solar installers think of the idea that a building should be made energy efficient before solar equipment is installed?

I’ve heard some solar leaders say “Energy efficiency eventually, sales first.” That makes complete sense in some cases, where the solar installer has recruited the customer and the customer already has an energy efficient home. If the customer has to call another contractor to come in and get the building 5 percent more efficient at a high cost before the solar project can go forward it is going to kill the solar project.

But, in the cases where the home is older and simply leaking energy out of its thin windows and walls, the solar company that recruits this customer has an opportunity to sell a bigger job by doing the energy retrofit project, or partnering with a building performance contractor. I picture the energy efficiency first requirements as a mandate for smart contractors to become energy service companies, not just solar, not just efficiency.

Energy retrofit work isn’t always easy, and sometimes it is hard to find energy contractors. Can solar installers always find contractors to the work if a home must be made efficient before solar is added?

It’s not easy, but it’s possible. And where there is challenge there is opportunity. The building performance contractor business is about to get very busy, and the entire trade will become more efficient and standardized with experience, just has it has developed in the PV and thermal businesses over time. We’re just in that rough spot between initial demand creation and plenty of supply available.

The EE industry seems more mature than solar in the United States. Will it create as many new job opportunities as solar?

You’re right about the energy efficiency industry being more mature than the solar PV industry. Efficiency technology and energy management controls has been a big business since the early 1990s, and in my state of California we’ve had ratepayer energy efficiency programs since the early 1980s.

But growth is continuing in EE. As utilities begin meeting mandates to change their energy mix the need to reduce and then control energy demand becomes highly profitable.

The new job opportunities are for engineers of every type as more engineering and construction firms begin to tackle retrofit services and energy management. But not just engineers. There are thousands of program managers, analysts, customer service representatives, and marketing-related positions behind the effort to get billions of dollars of energy efficiency rebates out the door. These jobs are usually with consulting and contracting firms that actually implement the efficiency programs on behalf of the utility.

We see a lot of discussion about smart grid and home energy use. But shouldn’t policy focus on the big energy users, commercial and industrial buildings?

You said the magic term: smart grid — the elusive king of all change agents in terms of merging megabytes (of data) and megawatts (of energy demand.) People focus on what they know best, and as we all live in homes, the residential market will get the most buzz on and off line. When smart energy management technology infiltrates our homes, it will be accelerated in our businesses and institutions.

The vision for a smart grid is to provide users the information they need to really manage their energy use, and enable grid operators to balance the grid when there are millions of energy producers, not just a hundred thousand. So, no, I don’t think it helps to focus on just the largest energy users. The energy grid will be the basis of a sustainable economy when both the largest users and the majority of users can intelligently manage their own usage.

Liz Merry will lead a half-day workshop, “Solar Industry Primer,” October 11, 2010 at Solar Power International in Anaheim, Calif., http://bit.ly/cKb60F.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” http://www.realwriters.net/rew/rtlnkpr.htm