Community Solar Governance: Institutional Design and Collective Choice Options: Implications for U.S. Markets

Abstract

To assess market development, and governance and equity implications in detail, the research team investigates programs in California, Massachusetts, and New York. The analysis yields insight into the current and future operation of Community Clean Energy authorities (CCEs) in these three states. We estimate that the CCEs in operation in the three states in question now represent over 15 million people. In particular, we identify 471 cities, towns, and counties that have embarked on the community solar choice and CCE authority trajectory. For each state, we assess market conditions by evaluating solar sales, contracts, CCE coverage, and CCE market scale. We find that 55%+ of the Massachusetts population now resides in jurisdictions with active CCE efforts and the same is true for ~41% of the California population. Rapid growth of the CCE model is expected to continue in all three states. We find that CCEs spur substantial solar energy deployment. For example, we were able to examine 85 solar energy transactions by California CCEs that together exceed 3.8 GWp of solar capacity. Our analysis of governance and equity considerations finds that operational CCEs can be classified into two main types: a) a City/County model where individual municipalities embark on community-wide energy decision-making; and b) a joint powers agency (JPA) model where municipalities engage in a collaborative framework to make joint decisions affecting their energy futures. We find both models in all three states. We observe a tendency for JPA strategies to emerge after City/County models have been in operation in the state.

We further find that larger, more mature CCE efforts typically emphasize a more sophisticated level of community inputs. CCEs are realizing lower solar-generated electricity prices compared to incumbent utility offerings. The benefits are often explicitly shared with low- and moderate- income families that receive, for instance, temporary relief due to emergencies like the COVID-19 pandemic and permanent discounts on their electricity bills through bill offsets and shared savings. CCEs in California, Massachusetts, and New York are earmarking solar energy deployment that directly serves LMI households through discounted electricity offerings. The solar energy programs and projects initiated by CCEs in the three states are managed and overseen by local governments. While the extent and depth of local government participation varies, we see evidence in all three states that local government oversight produces benefits for the community as a whole that would otherwise be unavailable in utility or private developer-based subscriber programs. CCE authorities provided rights and consumer protection not often found in utility and private developer-based subscriber models. This governance benefit leverages community-wide interests and power. The observed CCEs are engaged in a process of innovation where more and more services and functions are initiated in service to the community. No longer is it the case that these entities are solely motivated to deliver lower electricity prices for their community.

Keywords: Community solar, solar PV, energy governance, sustainable energy, solar choice