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Middle Ground in Customer-Utility Relationship? Analyzing the Drivers of Variations in Deployment Models for Community Solar

42 Pages Posted: 1 Apr 2015  

Erik Funkhouser

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs

Griselda Blackburn

University of Texas at Austin

Clare Magee

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs

Varun Rai

University of Texas at Austin - LBJ School of Public Affairs

Date Written: March 30, 2015

Abstract

Increasing penetration of residential photovoltaic (PV) systems has intensified concerns over the related impacts on utility revenue and the equity of deployment subsidies. Community solar (CS) has surfaced as an alternative deployment model for PV that could potentially mitigate these concerns, while integrating distributed solar PV. Given the potential that CS holds in stabilizing the customer-utility relationship amid deeper penetration of distributed solar, in this paper we combine four complementary datasets to analyze how policy, regulatory, and market factors impact the deployment of CS. Specifically, we present a detailed assessment of CS deployment in the United States, including pertinent insights relating to nameplate capacity, billing models, propensities of off-taker utilities to adopt different types of CS, and local market and policy drivers. We find that accounting for both underlying demand and policy/regulatory conditions is essential for understanding the nuanced connections between utility strategy and CS adoption. A particularly interesting finding, stemming consistently across the multiple data streams we analyze, is that utilities are motivated to develop CS not only to satisfy consumer demand or regulatory requirements for renewable energy, but also to alleviate revenue losses related to residential solar PV.

Keywords: Solar PV, Community Solar, Utility Business Model, Distributed Generation, Renewable Portfolio Standards, Net Energy Metering

JEL Classification: D21, L21, L94, Q28, Q40

Suggested Citation

Funkhouser, Erik and Blackburn, Griselda and Magee, Clare and Rai, Varun, Middle Ground in Customer-Utility Relationship? Analyzing the Drivers of Variations in Deployment Models for Community Solar (March 30, 2015). Available at SSRN: https://ssrn.com/abstract=2587102 or http://dx.doi.org/10.2139/ssrn.2587102

Erik Funkhouser

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs ( email )

2300 Red River St., Stop E2700
PO Box Y
Austin, TX 78713
United States

Griselda Blackburn

University of Texas at Austin ( email )

Austin, TX 78712
United States

Clare Magee

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs ( email )

2300 Red River St., Stop E2700
PO Box Y
Austin, TX 78713
United States

Varun Rai (Contact Author)

University of Texas at Austin - LBJ School of Public Affairs ( email )

2300 Red River St., Stop E2700
PO Box Y
Austin, TX 78713
United States

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